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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.
As a production’s budget climbs past $3.3 million and the project graduates out of the Ultra Low Budget tier, it enters the next IATSE tier: Tier 1.
Tier 1 film budgets represent the IATSE entry point for a typical independent film shooting at union scale. However, there can be a vast difference between productions working at the high-end and the low-end of this spectrum.
Therefore, Tier 1 film budgets are segmented into two distinct subtiers, Tier 1A and Tier 1B, each with different wage rates and requirements for qualifying productions.
Under the 2026–2028 agreement, the total production costs of a Tier 1A film must be over $3.3 million but not more than $6.875 million, including all qualifying above-the-line and below-the-line costs across every phase of production.
Films with budgets that fell within this range include Lost in Translation and Get Out.
Just beyond Tier 1A, but still within the Tier 1 film budget range, you’ll find Tier 1B.
Tier 1B covers productions with total qualifying costs of over $6.875 million but no more than $9.9 million.
Films like Manchester by the Sea, Nightcrawler, and Me and Earl and the Dying Girl fall within this general tier range.
The next step up from Tier 1B are productions with Tier 2 film budgets. Tier 2 covers productions with total qualifying costs of over $9.9 million but no more than $13.75 million.
If Beale Street Could Talk is an example of an independent film that falls within the Tier 2 film budget range.
Tier 3 is the final level covered under IATSE's Low Budget Theatrical Agreement. Productions must have total qualifying costs of over $13.75 million but no more than $16.5 million fall into Tier 3.
Under the Skin is a good representation of an independent film that qualifies at the Tier 3 film budget level.
Productions with qualifying costs exceeding $16.5 million no longer fall under the IATSE Low Budget Theatrical Agreement.
Films operating above this threshold must refer to separate IATSE agreements depending on region and other factors. The most fundamental is the current IATSE Basic Agreement, but check with your local union representatives before making any contract assumptions.
The 2026–2028 IATSE Low Budget includes meaningful consequences if your actual production costs exceed your budgeted tier. Here's what producers need to know:
If your final costs exceed the applicable tier ceiling by more than 10%, all covered employees must be paid retroactively at the wage rates of the then-current IATSE Basic Agreement.
There is a safe harbor provision, however: if you notify IATSE in writing at least two weeks before the completion of all post-production that your costs have exceeded the tier, your wage rates will automatically adjust to the next applicable low-budget tier instead of triggering full Basic Agreement rates.
Therefore, proactive cost tracking and timely notification are critical.
No matter which of the IATSE film budget tiers your production falls into, Wrapbook is built to make the financial side of filmmaking easier.
From crew onboarding and union compliance to payroll, accounts payable, and production accounting, Wrapbook gives independent producers the tools to run a leaner, more connected production from start to wrap.
As you begin budgeting your project, Wrapbook’s Rate Finder tool can help you stay on top of union complexities. The Rate Finder tool supports productions accurately and easily paying union workers by providing the most current wage rates for all major unions, including IATSE Low Budget Rates.
The film budget tiers within the 2026–2028 IATSE Low Budget Theatrical Agreement are an essential reference point for independent filmmakers. With the agreement's updated thresholds for every tier and new union labor provisions, it’s more important than ever to understand exactly where your production stands and what your obligations are.
To explore current wage rates across every IATSE Low Budget tier, along with rates for all the major unions, check out Wrapbook’s Rate Finder tool. And if you’re curious to learn more about running union payroll compliantly, schedule a demo with Wrapbook today.
The term “low budget” gets thrown 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 need to know about film budget tiers for indie production.
We’ll cover each level of IATSE’s indie film low-budget union tiers, from Ultra Low budget productions to Tier 3 film budgets, while highlighting critical information and providing additional resources along the way.
Let’s get into it.
IATSE film budget tiers exist on the basis of a single, simple truth most independent filmmakers already know well: not all low budget features are created—or budgeted—equally.
The realities of independent filmmaking in the digital era have made it possible to make a movie across a far wider range of financial constraints, upending any straightforward definition of what it means for a film to be "low budget" in the process.
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 $16.5 million to be low budget under its 2026–2028 agreement.
To put that range in perspective, it means a film budgeted at $16 million and a micro-budget debut shot for only $60,000 both technically qualify as "low budget" under IATSE's current criteria.
IATSE recognizes that tension. In order to tailor union regulations to budget realities, IATSE has built a series of indie film low-budget union tiers into the framework of its Low Budget Theatrical Agreement.
These IATSE tiers establish pay rates and other labor protections for crew that scale as production budgets grow.
IATSE film budget tiers cover everything from the smallest productions, which fit within the "Ultra Low Budget” tier (colloquially known as Tier Zero) all the way up to $16.5 million productions in Tier 3.
In the 2026-2028 Low Budget Theatrical Agreement, IATSE film budget tiers break down as follows:
The agreement sets the lowest rates for productions that fall into the Ultra Low Budget tier, with higher rates for projects in the Tier 1 film budget range and so on.
Theoretically, these tiers help level the playing field between studio features and true independents operating on a shoestring budget. They allow productions of all sizes to fairly and compliantly compensate their crews while distributing financial resources responsibly.
Below, we’ll look closely at each of these IATSE film budget tiers to better understand what projects fall into each range.
Note: this post discusses only those low budget tiers as defined by IATSE and reflects the 2026–2028 IATSE Low Budget Theatrical Agreement, which took effect January 1, 2026. For further information on film budget tiers from other unions, check out our Essential Guide to SAG-AFTRA Rates, our Essential Guide to the DGA Rate Card, or explore our Rate Finder tool.
Before diving into IATSE’s low budget tiers, it's worth understanding exactly what counts as "production costs" under the current agreement, because it directly affects which tier a production falls into.
Under the 2026–2028 agreement, production costs include all above-the-line and below-the-line costs, as well as pre-production, production, and post-production expenses. However, two important items are excluded from the calculation:
In practice, this means the functional ceiling for each tier is somewhat higher than the stated dollar figure. Productions budgeting close to a tier limit should work through this calculation carefully with their line producer and legal counsel.
Union guidelines also frequently update. The 2026–2028 IATSE Low Budget Agreement provides current wage rates for each IATSE tier, which are different from IATSE Low Budget wage rates in years past. Mistakes in applying the correct rates can lead to costly errors.
Producers and production accountants can use Wrapbook’s Rate Finder tool to find the current rates for all the major unions, including IATSE, at any tier and in all relevant jurisdictions.
Often referred to as “Tier Zero” by producers and crew, the Ultra Low Budget tier is the lowest budgeted level of production covered under the IATSE Low Budget Theatrical Agreement. It's the closest IATSE currently comes to a true micro-budget tier.
The total production costs of an Ultra Low Budget film must come in at or below $3.3 million.
In addition to the budget cap, films operating at Ultra Low Budget tier must be scheduled for at least 15 days of principal photography. This prevents short-form content from taking undue advantage of the tier's relatively reduced union requirements.
Per the 2026–2028 IATSE Low Budget Theatrical Agreement, Ultra Low Budget productions must negotiate wage rates with each covered employee. Minimum hourly wage is set at 125% of the applicable statutory minimum wage (and in no event less than $15/hour) with overtime computed per applicable law.
