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When we see movies in a theater, it’s usually easy to spot the budget difference between a studio-produced blockbuster and a micro-budget indie, but what about film budget tiers that are a little closer together?
We throw the term “low budget” around often in the independent filmmaking community, but what is considered a low budget film technically?
In this post, we’re digging into the IATSE Low Budget Theatrical Agreement to bring you everything you want to know about film budget tiers for indie production. We’ll give you a basic breakdown of each level, from Tier Zero to Tier Three film budgets, highlighting critical information and providing additional resources along the way.
Let’s dive in.
The IATSE budget tier system exists on the basis of a single, simple, ever-so-slightly harsh truth of which most independent filmmakers are already all too aware: Not all low budget features are created equal.
Or at least they’re not budgeted equally. The strange realities of independent filmmaking in a digital era have made it possible to make a movie within a far wider range of financial limitations, upending any traditional or otherwise straightforward conception of what it means for a film to be “low budget” in the process.
By the way, that’s not just an anecdotal observation. The fragmented definition of “low budget” is reflected in the regulations of most major filmmaking unions and guilds.
The International Alliance of Theatrical Stage Employees (IATSE), for example, currently considers any feature film budgeted between zero and 15 million dollars to be low budget.
To put that range into perspective, it means that a movie like Drive (budgeted at $15 million) and The Blair Witch Project (famously made on the literal shoestring budget of $60,000) would both qualify as “low budget” productions according to IATSE’s up-to-date criteria.
And IATSE gets the point, too.
In order to adjust union regulations to meet the budget complexities of our times, IATSE has built a series of film budget tiers into the framework of its Low Budget Theatrical Agreement.
Each of these film budget tiers carries a different degree of financial burden in terms of pay rate requirements. The exact level of financial burden varies according to exactly how low a production’s budget is.
A Tier Zero film budget faces less intense requirements than a Tier One A film budget, which faces less intense requirements than a Tier Two film budget, and so on.
Theoretically, these film budget tiers level the union playing field between blockbusting productions shot in galaxies far, far away and mini-mumblecore horror productions shot by local actors with camcorders in spooky state parks.
Below, we’ll dig into the basics of IATSE’s low film budget tiers. Please note that this post discusses only those low budget tiers as defined by IATSE. For further information on budget tiers from other unions, check out our Essential Guide to SAG-AFTRA Rates or our Essential Guide to the DGA Rate Card over on the Wrapbook Blog.
Now, before we break down any individual budget tiers, let’s handle one more piece of business:
If you’re prepping for a low budget shoot of your own, take a moment to download Wrapbook’s free film budget template before scrolling further.
Understanding your production’s expenses in detail is a critical component of working within the IATSE tier system, and our template will help you get a clear view on your costs as fast as possible.
And who knows? Maybe you’ll even spot a clever way to reduce your Tier Two film budget into a Tier One B film budget along the way.
With your budget template in hand, let’s look at the lowest of IATSE’s film budget tiers.
Also known as IATSE’s “Ultra-Low” budget tier, Tier Zero is the lowest budgeted level of production covered by the current IATSE Low Budget Theatrical Agreement. It’s the closest that IATSE currently comes to a “micro-budget” tier.
The production costs of a Tier Zero film budget must come in at or below three million dollars in total. This number must account for all production costs: “above the line,” “below the line,” pre-production, production, and post-production. Everything.
On top of the Tier Zero film budget limit, films qualifying for operation within the Tier Zero classification must also be scheduled to shoot for at least 15 days of principal photography. This prevents short form content from taking undue advantage of Tier Zero’s relatively loosened union requirements.
Tier One A film budgets represent the IATSE entry point for a typical independent film shooting at union scale. This is the budget realm for movies like Lost in Translation and Get Out.
The production costs of a Tier One A film budget must come in over 3 million dollars but at or below 6.25 million dollars in total. Again, that amount must account for all production costs, spanning each phase of the film’s creation and including both above and below the line payroll costs.
The production costs of a Tier One B film budget must amount over 6.25 million dollars but not more than 9 million dollars in total. As with Tier One A, the production costs of a Tier One B film budget must include all expenses from pre-production through post-production, including any above or below the line payments or fees.
Tier One B of IATSE’s Low Budget Theatrical Agreement covers indie movies like Manchester by the Sea, Nightcrawler, or Me and Earl and the Dying Girl.
The production costs of a Tier Two film budget must amount over 9 million dollars but not more than 12.5 million dollars in total. The production costs of a Tier Two film budget must include all expenses from pre-production through post-production, including any above or below the line payments or fees.
If Beale Street Could Talk is an independent film that qualifies as Tier Two.
Tier Three is the final budget level covered under IATSE’s Low Budget Theatrical Agreement. Under the Skin is an independent film that qualifies at Tier Three.
The production costs of a Tier Three film budget must be greater than 12.5 million dollars but not more than 15 million dollars. As with other IATSE film budget tiers, the production costs of a Tier Three project must include all production costs over the course of the project’s creation, including above and below the line payments.
Productions budgeting for costs in excess of 15 million dollars no longer qualify for the IATSE Low Budget Theatrical Agreement. While movies like Raging Bull and A Quiet Place certainly hold onto a certain indie film flare, they are neither objectively nor technically considered “low budget” feature films (by IATSE).
Productions that cross the $15 million budget threshold must refer to separate IATSE agreements, depending on region and other circumstances. The most fundamental and pervasive of these is the current IATSE Basic Agreement, but it’s important to check with your local union representatives before making any contract assumptions.
No matter which of the IATSE film budget tiers your production occupies, Wrapbook’s entertainment payroll solution can save you considerable time, money, and stress.
Each and every pixel of Wrapbook has been designed to put as much power as possible directly into the hands of independent filmmakers like you. Wrapbook makes it easier to onboard crew, work with unions, and get your cast and crew paid as efficiently as possible.
Check out the demo to see what our film payroll services can do for you.
The film budget tiers within the IATSE Low Budget Agreement offer a crucial guide for independent filmmakers working just above micro-budget limits. Be sure to use our free budget template to take the tiers into consideration when planning your next low budget shoot.
If you’re interested in learning more about production budgeting and film payroll, check out our breakdown of how to create a film budget.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
The Wrapbook Team consists of individuals who are thrilled about building modern software tools for creators. We’re a team of compassionate and curious people dedicated to solving complex problems with sophisticated solutions. You can find us across the U.S. and Canada.
