Pick the base before you pick the percentage
"10% contingency" means nothing until you say 10% of what. Here's a fictional feature, SALT FLATS, and four ways to figure the same 10%:
| Budget block | Amount |
|---|---|
| Above the line | $250,000 |
| Production (2000 to 3800) | $720,000 |
| Post | $160,000 |
| Other (of which insurance is $28,000) | $70,000 |
| Total | $1,200,000 |
| Base | Math | Contingency |
|---|---|---|
| Everything | $1,200,000 x 0.10 | $120,000 |
| Everything except insurance | ($1,200,000 - $28,000) x 0.10 | $117,200 |
| Below the line only | ($720,000 + $160,000 + $70,000) x 0.10 | $95,000 |
| Production and post only | ($720,000 + $160,000) x 0.10 | $88,000 |
That's a $32,000 spread between the largest and smallest figure, all called "10%". Excluding fixed items like an insurance premium or a bond fee makes sense, since those don't go over. Excluding above the line is defensible when every above-the-line deal is a signed flat fee, and harder to defend when cast includes day players whose days can grow. Whatever you choose, write it next to the line: "Contingency, 10% of production and post".
Test the percentage against a risk list
A percentage is a guess about risk. The better way to set it is to list the risks the script and shooting schedule actually contain and price a realistic hit for each. The figures below are examples built from the SALT FLATS schedule.
| Risk | Assumption | Cost |
|---|---|---|
| Weather on 7 exterior days | Lose 1 full day at $31,500 per shoot day | $31,500 |
| Overtime on 5 night exteriors | 5 nights x 2 extra hours x 38 crew x $45 average x 1.5 | $25,650 |
| A location falls through | Site fee premium $6,000 plus an extra scout and tech day $4,000 | $10,000 |
| Picture car and SFX rework | Allowance for one gag rebuilt | $8,000 |
| Music license costs more than quoted | Allowance | $12,000 |
| Total identified risk | $87,150 |
The overtime line works out as 5 x 2 x 38 = 380 crew hours, and 380 x $45 x 1.5 = $25,650. You can check individual overtime assumptions with the overtime calculator.
$87,150 is almost exactly the $88,000 you get from 10% of production and post. On that base, the risks you can already name use up the whole reserve, leaving nothing for the ones you can't. On the full $1,200,000 base, $120,000 covers the named risks and leaves $32,850 for surprises. For SALT FLATS the producer would either use the larger base or cut exposure, for example by moving two of the exterior days next to a cover set.
The list also changes the conversation with investors. "We carry 10%" is a formula. "We carry $120,000 against $87,150 of identified risk, including a weather day" tells them you read the schedule.
What contingency isn't for
Contingency covers risk, not known costs that didn't get a line. Three habits hide known costs in it:
- A scripted stunt with no stunt coordinator or safety line, on the theory that "contingency will cover it".
- Deliverables left out of post because the distributor list hasn't arrived.
- Padding every department by 5% and then adding 10% on top, which double-counts and makes the cost report useless because every account looks under budget for weeks.
If a cost is known, give it a line. If it's uncertain in size, give it a line at your best estimate and let contingency cover the variance.
Contingency and union caps
Some union agreements are set by total budget, and contingency is part of a total budget. SAG-AFTRA's Moderate Low Budget Agreement, for example, applies to films with a total budget of less than $700,000. A picture with $640,000 of costs and a 10% contingency comes to $640,000 x 1.10 = $704,000, which is over that line.
Before you apply, ask SAG-AFTRA how it will count your contingency. If the budget only fits the agreement with contingency left out, you're betting that none of it gets spent. Our SAG-AFTRA tiers entry lists the caps and what raises them.
Tracking draws during production
Once cameras roll, contingency becomes its own account on the weekly report. Overages show first against the account that went over, and the producer decides whether to cover them from contingency. A draw log for SALT FLATS:
| Week | Draw | Reason | Remaining |
|---|---|---|---|
| Start | Budgeted contingency | $120,000 | |
| 1 | $5,700 | Grip: added rigging crew for the diner | $114,300 |
| 2 | $16,200 | Half day lost to rain on Day 8 | $98,100 |
| 3 | $7,450 | Overtime and meal penalties, nights 2 and 3 | $90,650 |
| 4 | $9,800 | Replacement for the motel location | $80,850 |
| Wrap | $3,100 | Loss and damage on the grip package | $77,750 |
Draws total $42,250, which is 35.2% of the reserve, with $77,750 left for post. That's a healthy picture at wrap. A log that shows 60% gone by the end of week 2 of a 5-week shoot is the moment to cut pages or days, because the estimate to complete is about to swallow the rest.
On a bonded picture the guarantor watches the same numbers. Film Finances, for instance, requires daily shooting progress reports and weekly cost updates during production. Your financing and completion agreements will say who has to approve a draw, so read those clauses before the first one.
When a script earns more than 10%
Some pages carry risk that a flat percentage won't cover. The risk list usually shows it, but these are the scripts where it tends to come out high:
- Water work and boats. A day lost to wind or swell costs a full crew day plus marine rentals, and the safety personnel are paid either way.
- Minors in lead roles. State rules limit their hours on set, so a slow morning can push a scene with a child into another day. Budget the extra day, then check the schedule against working with minors on set.
- Animals and practical effects that need multiple takes to work, where each reset costs time the schedule may not have.
- Post-heavy pictures. If a third of the story depends on VFX shots nobody has bid yet, the variance in that one account can outrun a 10% reserve on the whole film.
- Shooting outside the US in another currency. A budget priced at one exchange rate and paid at another moves every foreign line at once.
Going the other way, a contained drama on two stages with signed flat deals can argue for less. Show the risk list either way. A financier will accept 8% with a list that justifies it faster than 10% with no reasoning.
What happens to contingency at wrap
Unspent contingency at the end of shooting doesn't vanish. It rolls into post, where music clearances, extra mix days, and deliverables are the usual draws. What happens to any amount left after delivery is a financing question, not a budgeting one, so check how your investor and loan documents treat underspend before anyone promises it to a department.
Where contingency sits in the budget
Contingency goes below the above-and-below-the-line total on the top sheet, above any completion bond fee and the grand total. It isn't a department account, and nobody should code an invoice to it directly; costs get coded to the account they belong to, and the transfer from contingency is a separate entry.
In Storiara's budget setup wizard, contingency is a percentage you set, and it appears as a top-level amount in the summary bar next to the above-the-line, below-the-line, post, and other totals. The film budget template has a contingency row with the base written out, and the film budget estimator includes it in its range. For how draws show up week to week, read how to read a film cost report.