Saturday, February 22, 2014

Understanding SAG residuals (part 1) -- SAG Final Cast List, Time and Salary Units

Residuals are income due to SAG performers (or other union members such as the DGA or WGA) as your film makes money in its various ancillary markets. I will now attempt to explain the residual process over a series of blogs.

I'll breakdown from what you pay residuals on in another blog. We'll start now with how SAG calculates what percentage of the total residual payment each actor gets. We'll do this because it's the first thing you have to deal with because it's calculated on the SAG Final Cast List that you turn in at the end of production. Your payroll company may fill this out. A recent company told me they'd charge an additional $100 to fill it out, so to save a few bucks I took the opportunity to learn how it works and do it myself.

In calculating who gets what we work with what's called "SALARY UNITS" and "TIME UNITS." These units measure the distribution of residuals based on the amount of money they made and time they spent on your project.

They are calculated differently for performers on a weekly or daily contract. SAG sets a different rate for weekly or daily performer, with a weekly performer rate being slightly less than the total of five days worked on a daily contract. Unless a performer is only working a few consecutive days they should always be scheduled as weekly performer. Unless, you're shooting with the SAG Ultra Low Budget contract, in which case there is no option for weekly performers.

Weekly Contracts (See the chart below for examples).

Weekly Salary Units: For each week worked a performer working for the weekly scale rate receives one Salary Unit. Weeks are calculated by five days, so if they worked six days, it's one week plus one day. Each day is equal to .2 units, so a person on a weekly contract who works six days will receive 1.2 salary units, and so on.

If, however, the person makes any more than scale, due to a higher rate, or even over time, then the weekly scale is divided into their total salary to determine units.

To find out what their total Salary Units would be you'd divide the performer's gross salary received by SAG's designated scale for whatever particular contract you are working with.

For instance, if someone in a low budget modified project (which has a $933.00 scale for weekly performers) received a flat guarantee of $5,000 the equation would be:

5,000 ÷ 933 = 5.36

Or, in other words: salary units = total gross ÷  weekly scale

So the performer would receive 5.35 Salary Units. However, to prevent uneven payment among performers, Salary Units max out at ten (10). So, in the example below (see the chart), the top performer received a flat guarantee of $20,000 for twelve days worked. Applying the formula results in this:

20,000 ÷ 933 = 21.44 

But, since Salary Units max at ten, this performer receives 10 Salary Units.

Weekly Time Units: Each week worked is equal to one Time Unit. Because each day is worth .2 units, the performer working six days would receive 1.2 Time units. This will stay the same whether they're working scale or being paid a million dollars a day. For instance, in the chart below, the person on the first line is working for a high flat rate, but their time units still reflect the amount of days they actually worked.

Daily Contracts

Daily Time Units: Daily time units were laid out above: .2 units for each day. So an actor who works four days receives .8 units and an actor who works fifteen days receives 3 units.

Daily Salary Units: Daily Salary Units are, like their weekly counterparts, a bit more complicated. You take the performer's TOTAL GROSS SALARY divide that by scale, then multiply that by .2. The equation looks like this:

salary unit=total gross ÷ daily scale x .2

Consequently, a player who works one day at scale without overtime will always have a total salary unit of .2, because (using the SAG Low Budget Modified contract) $268 (total gross) ÷ $268 (scale) = 1 x .2 = .2.

If a player is making more than scale, then this formula will remain the same and work fine. As in: $1000 ÷ $268 = 3.73 x .2 = .75.

Once you've calculated the Time and Salary Units you simply add them up to get the Total Units. You then add up the Total Units for the Total Cast Units and then calculate what total percentage each performer has of the total, which will show you how to divvy up those residuals when it's time to pay them out.

For an example look at this copy of a Final Cast List from a Low Budget Modified film that I produced. The Weekly players are above the middle black line, and the daily players are below the middle black line.

An screenshot from an actual Final Cast List for a Low Budget Modified project (scale = $268)

We'll get to how to calculate what needs to be paid from what income in a later post. So, stay tuned for that and happy shooting.

In the meantime: 

I've worked with several payroll companies in Hollywood and elsewhere, but not many of them will also handle Residuals. Entertainment Partners are one of the largest that does, and my experience with them has been great. They have my recommendation.