# Tier Projects: How a Film's Budget Size Sets Union Crew Rates

Source: https://storiara.com/blog/understanding-tier-projects-how-budget-size-affects-crew-rates
Last updated: 2026-09-14
Author: Nick Harty, Storiara

> A tier project is a union film whose budget falls under a low budget agreement's ceiling, so it pays reduced minimums. Under IATSE's Low Budget Theatrical Agreement, features budgeted up to $15 million fall into Ultra Low, 1A, 1B, 2, or 3 tiers, each with its own wage scale. SAG-AFTRA uses separate caps of $300,000, $700,000, and $2,000,000. Going over a tier can mean paying higher rates retroactively.

In US union production, the budget number does more than tell the financier what the film costs. It decides which agreement the crew and cast work under, and which wage scale applies. A feature budgeted at $8.5 million pays its union set dressers a different hourly minimum than one budgeted at $9.5 million, even if the two shows are shot the same way in the same city. Those budget bands are called tiers, and a union film that fits under one is called a tier project.

This post is the cross-union overview. The detail on each agreement lives in [the IATSE Low Budget Theatrical Agreement](https://storiara.com/blog/iatse-low-budget-theatrical-agreement), [SAG-AFTRA low budget agreements](https://storiara.com/blog/sag-aftra-low-budget-agreements), and [the DGA low budget agreement](https://storiara.com/blog/dga-low-budget-agreement).

## IATSE's theatrical tiers

The IATSE Low Budget Theatrical Agreement applies to feature-length films for first theatrical release made in the US or Canada with production costs inside its tiers. The 2023-2025 agreement text, as posted by IATSE Local 44, sets these bands:

| Tier | Production costs budgeted | Other conditions |
|---|---|---|
| Ultra Low | Up to $3,000,000 | At least 15 days of scheduled principal photography |
| Tier 1A | $3,000,001 to $6,250,000 | |
| Tier 1B | $6,250,001 to $9,000,000 | |
| Tier 2 | $9,000,001 to $12,500,000 | |
| Tier 3 | $12,500,001 to $15,000,000 | |
| Beyond Tier 3 | Over $15,000,000 | Basic Agreement, New York "Majors" agreements, or Area Standards Agreement apply |

That agreement's term ran through December 31, 2025. Tier thresholds and rates are renegotiated with each agreement, so confirm the current figures with IATSE or the local before you budget.

On Ultra Low productions, wages are negotiated person by person but can't be less than 125% of the applicable statutory minimum wage, with a floor of $13, $14, and $15 an hour across the agreement's three years. If a production shows a pattern of paying below that, every covered employee is owed Tier Two rates retroactively.

## What counts toward the tier

The agreement defines production costs broadly: all above-the-line and below-the-line costs, across pre-production, production, and post. Only two things come out:

- The completion bond premium.
- A contingency of up to 10% of the budget.

That's a shorter exclusion list than many producers expect. Financing costs, insurance premiums, and publicity aren't excluded by this agreement's definition, so they count toward the tier. When actual costs are later compared with the tier, costs reimbursed by insurance are left out, and January wage and benefit increases don't count as production costs for films that started shooting before them.

The tier is set by the budget at the start of principal photography, in US dollars.

Here's an $8,400,000 budget checked against the tiers:

| Line | Amount |
|---|---|
| Total budget | $8,400,000 |
| Less completion bond premium | ($180,000) |
| Less contingency (under the 10% limit) | ($720,000) |
| Production costs for tier purposes | $7,500,000 |
| Tier | 1B ($6,250,001 to $9,000,000) |

If the producer had carried a 12% contingency instead, only the portion up to 10% of the budget would come out, and the rest would count.

## How much the tier changes the rate

IATSE Local 44's 2024 at-a-glance rate sheet for the Low Budget Theatrical Agreement shows how the scale steps up. For property persons (swing gang, set dressing):

| Tier | Hourly minimum, 2024 |
|---|---|
| Tier 1A | $26.03 |
| Tier 1B | $27.59 |
| Tier 2 | $36.67 |
| Tier 3 | $38.63 |

For comparison, Local 44's Basic Agreement schedule for theatrical motion pictures over $15 million (August 4, 2024 to August 2, 2025) lists $50.35 an hour for the same classification. The biggest jump is between Tier 1B and Tier 2: $36.67 minus $27.59 is $9.08 an hour, a 33% increase.

On a set dressing crew of 6, working 12 weeks at 50 straight-time hours a week (overtime priced separately):

- Tier 1B: 6 x 12 x 50 x $27.59 = $99,324
- Tier 2: 6 x 12 x 50 x $36.67 = $132,012
- Difference: $32,688, before overtime and fringes

Multiply that across every department and the difference between tiers on a full crew runs well into six figures. Benefit contributions also change by tier. Under the agreement's general schedule, 2025 contributions were $137 a day for Ultra Low and Tier One productions and $139 a day for Tier Two and Three; production city locals with their own plans have higher, tier-specific amounts.

## What happens when you go over

This is where tier projects get expensive. The agreement gives IATSE the right to request a final expenditure report and inspect budget and cost records, including after release, and to bring a grievance within 12 months of the film's initial release.

If actual production costs (excluding insurance-reimbursed costs) exceed the tier by more than 10%, the consequences depend on whether the employer told IATSE:

| Situation | Result under the agreement |
|---|---|
| Final cost within 10% over the tier ceiling | No adjustment |
| More than 10% over, and employer gave written notice at least two weeks before post was complete | Wage rates move to the tier that covers the actual cost |
| More than 10% over, no notice given | Basic Agreement and local agreement rates, premiums, overtime, and travel, retroactively |
| More than 10% over the Tier 3 limit | Basic Agreement and local agreement terms, retroactively |
| Overage caused by an act of God, fire, earthquake, or governmental action | Retroactive payments not required |

Take the $7,500,000 Tier 1B film above. Its ceiling is $9,000,000, so the 10% threshold is $9,900,000. If reshoots and a VFX overage push final production costs to $9,600,000, there's no adjustment. At $10,200,000, there is. With timely notice, the crew moves to Tier 2 rates retroactively, which on the set dressing crew alone is the $32,688 calculated above. Without notice, the same crew is owed Basic Agreement rates: 6 x 12 x 50 x ($50.35 minus $27.59) = $81,936 for that one department, plus the overtime, premiums, and travel differences. The notice letter is cheap. Put the two-weeks-before-post-completion deadline in the post schedule.

## SAG-AFTRA's tiers work differently

SAG-AFTRA's theatrical tiers sit much lower on the budget scale:

| Agreement | Budget cap | Day performer rate from July 1, 2026 |
|---|---|---|
| Ultra Low Budget | No more than $300,000 | $257 |
| Moderate Low Budget | Under $700,000 | $449 |
| Low Budget Theatrical | Under $2,000,000 | $834 |
| Codified Basic Agreement | Above the tiers | $1,283 |

The Basic Agreement day rate of $1,283 is from the 2026-30 SAG-AFTRA wage tables published by the AMPTP. The tier rates come from SAG-AFTRA's 2026 rate sheets, which set them at 20%, 35%, and 65% of the Basic rate. Diversity-in-casting incentives raise the Moderate Low cap to $950,000 and the Low Budget cap to $3,000,000, and the Moderate Low Budget agreement counts deferred compensation toward its cap.

In practice, a film at $5,000,000 is a Tier 1A crew show and a full-rate cast show at the same time, so the budget has to be priced against each agreement separately. The [SAG-AFTRA tiers](https://storiara.com/glossary/sag-aftra-tiers) glossary entry has a worked cast example.

## The DGA

The Directors Guild also has low budget terms for theatrical films, with budget levels that reduce minimums for directors, UPMs, and ADs. The levels and conditions differ from both IATSE's and SAG-AFTRA's, so price them from the DGA's current documents or ask the guild. [The DGA low budget agreement](https://storiara.com/blog/dga-low-budget-agreement) post covers them.

## Budgeting a tier project well

1. Calculate production costs for each union's definition before choosing rates. The same budget can sit in different places for each.
2. If you're near a line, look at what would move you across it: a star's raise, a second unit, an extra week of VFX. Decide consciously.
3. Keep contingency at or under 10% of the budget if you're counting on it being excluded from the IATSE tier.
4. Track final cost against the tier ceiling and the 10% threshold in the weekly cost report.
5. If costs will exceed the threshold, send IATSE written notice before the deadline.
6. Keep the records clean. The union can inspect them after release.

The [crew rate lookup](https://storiara.com/tools/crew-rate-lookup) and [film crew day rates](https://storiara.com/blog/film-crew-day-rates) help with the rates themselves, and the [iatse](https://storiara.com/glossary/iatse), [low budget agreement](https://storiara.com/glossary/low-budget-agreement), [moderate low budget agreement](https://storiara.com/glossary/moderate-low-budget-agreement), and [ultra low budget agreement](https://storiara.com/glossary/ultra-low-budget-agreement) entries define the terms used here.

Storiara's Budget setup asks for a union tier (non-union, SAG-AFTRA ultra low, modified low, or low budget, SAG basic, or full union) and uses it to fill rate gaps in the first-pass budget. Treat those built-in rates as placeholders and replace them with the current rate sheets for your agreement before you rely on the total.

## Frequently asked questions

### What are the IATSE low budget tiers?

Under the 2023-2025 IATSE Low Budget Theatrical Agreement: Ultra Low up to $3,000,000 with at least 15 scheduled shoot days, Tier 1A over $3,000,000 to $6,250,000, Tier 1B to $9,000,000, Tier 2 to $12,500,000, and Tier 3 to $15,000,000. Films over $15,000,000 go to the full Basic Agreement or area standards agreements. Check with IATSE for any successor agreement's figures.

### What is excluded from the budget when setting the IATSE tier?

The agreement counts all above-the-line and below-the-line costs across prep, production, and post, but leaves out the completion bond premium and a contingency of up to 10% of the budget. Costs reimbursed by insurance are excluded when final costs are compared with the tier.

### What happens if a tier project goes over budget?

Under the IATSE agreement, if final production costs exceed the tier by more than 10%, covered crew are owed retroactive pay. If the employer notifies IATSE in writing at least two weeks before post is complete, rates move up to the tier that fits the actual cost; without notice, Basic Agreement rates apply retroactively.

### Do SAG-AFTRA and IATSE use the same budget tiers?

No. SAG-AFTRA's Ultra Low, Moderate Low, and Low Budget agreements cap at $300,000, $700,000, and $2,000,000, while IATSE's tiers run up to $15,000,000. A $5,000,000 film is a low budget show for IATSE and a full-rate show for SAG-AFTRA.

## Sources

- [IATSE 2023-2025 Low Budget Theatrical Agreement (posted by IATSE Local 44)](https://local44.org/sites/default/files/2024-11/2023-2025%20Low%20Budget%20Theatrical%20Agreement%20(FINAL).pdf)
- [IATSE 2024 Low Budget Theatrical Agreement Rates at a Glance (IATSE Local 44)](https://local44.org/sites/default/files/2024-11/2024_Low_Budget_Theatrical_IATSE_Agreement_Rates.pdf)
- [IATSE Local 44: Studio minimum wage schedule for theatrical motion pictures over $15 million (8/4/24 to 8/2/25)](https://local44.org/sites/default/files/2024-11/STUDIO%20MINIMUM%20WAGE%20SCHEDULE%20FOR%20THEATRICAL%20MOTION%20PICTURES%20OVER%2015%20MILLION%20DOLLARS.pdf)
- [AMPTP: 2026-30 SAG-AFTRA Agreement Wage Tables](https://amptp.org/wp-content/themes/amptp/assets/pdf/SAG-AFTRA/2026-30%20SAG-AFTRA%20Rates_2026-05-27%204931-9242-3576%20v.4.pdf)
- [SAG-AFTRA 2026 Low Budget Theatrical Agreement Rate Sheet](https://www.sagaftra.org/sites/default/files/LBA%20Rate%20Sheet%2026-30.pdf)