Some confusion has popped up concerning marked up line items and the Pension and Welfare (P&W) calculation. Have a look at the following line item:

    12 Adults @ 1500.00/ea. = 18,000.00

Now lets look at the same line item marked up 20%. In BlinkBid individual line item markups are hidden from the client and represent pure profit for you.

Talent    12 Adults @ 1500.00/ea. + 20% = 21,600.00 (or 12 @ 1800.00/ea.)

The question is which value should the P&W applied to? And the answer is the 1500.00. The Pension & Welfare tax can only be applied to the actual amount being paid to the talent or crew person. The additional 300.00 in markup for the line item does not go to the individual so therefore it should not be taxed. So in the above scenarios, if P&W is 25% the following will be true.

Talent    12 Adults @ 1500.00/ea. + 20% = 21,600.00

  • The P&W for the line item is 4500.00 or (12 Adults @ 1500.00/ea. = 18,000.00) X 25% = 4500.00.

  • The anticipated (12 Adults @ 1500.00/ea. + 20% = 21,600.00) X 25% = 5400.00 is in fact incorrect because it multiples the P&W by the marked up amount.

BlinkBid handles all this automatically for you, but if you do some quick math it may appear that the numbers are wrong, when in fact they are correct.

For more articles related to this topic, click here.

Did this answer your question?