In the union feature film production world in the United States, the total budget of a project often determines if it will be classified as a "tier" project. Tier projects allow for lower base rates to be paid to crew compared to full-scale union agreements, which can be a significant advantage for independent filmmakers.
Current Budget Tiers (as of 2024)
Budget tiers are adjusted annually and can be found on the websites of various unions and guilds. The typical levels include:
- Tier 1A: Films with budgets between $3m and $6.25m.
- Tier 1B: Films with budgets between $6.25m and $9m.
- Tier 2: Films with budgets between $9m and $12.5m.
- Tier 3: Films with budgets between $12.5m and $15m.
Exclusions in Tier Calculations
When determining which tier a project fits into, certain costs are excluded from the calculation, effectively allowing more of the budget to go toward the production itself. These exclusions include:
- Financing costs (interest on loans, bank fees).
- Insurance premiums.
- Marketing and testing costs.
- Technical, music, and MPA license fees.
- Completion bond premium fees.
- Contingencies (not to exceed 10% of the budget).
The Importance of Staying on Budget
If a production goes over budget and the total cost exceeds the tier level on which the crew rates were based, the production will owe the difference to the entire crew. Additionally, the production will have to make larger contributions to the union pension and health funds. The unions regularly audit tier-level shows to ensure their members are paid correctly.