Welcome to one of the most confusing and difficult aspects of the entertainment industry—getting paid! Residuals (also known as royalties) are the bread and butter of the working actor’s life. They are what keeps you going when things get slow (and they DO get slow…for everyone. This biz is one big roller coaster!). They are that wonderful surprise deposit in your bank account, just when you need it most.
In the industry, your payment for the day you work is referred to as a “session fee”. Any payment you get after that is referred to as a “residual payment”. Residuals are the cornerstone of an industry system designed to compensate actors for the continued use of their performance. It is the actor’s fair share of the revenue generated from the project.
Residuals are paid to union actors when their performance is used again. There are different pay scales for different types of work (TV, film, commercials) which are dictated by different contracts (low budget, made for cable, feature films made for the theaters, etc).
Non-union projects do not pay residuals, since there is no real infrastructure to track actors down (sometimes 10 or 50 years later!) to pay them. When you work non-union, your session fee is usually all you are going to get. It is a common practice to offer a one time “buy-out”, an upfront payment that covers all usage. Sometimes that buy-out is for a large amount of money, but without a crystal ball, you’ll never know if it would have been more money than a session fee plus residuals would have been. Of course, a project is produced as “union” or “non-union”, and the actor does not control that. Non-union producers are not bound by the residual system. Residuals are one of the great benefits of union work in SAG-AFTRA or ACTRA.
British and Australian/New Zealand unions do not pay residuals, so if you work on a project in those countries make sure to ask for a SAG-AFTRA contract (Global Rule One).
Why Do I Get Residuals?
In general, actors aren’t paid for the first exhibition of their work—that is included in the session fee (your work day wages). Residuals are paid to actors when their performance is used AGAIN, or in a new way that was not intended when you originally worked. For example:
- A re-run of a television show
- A feature film that was released in the movie theater, but is now being released on Netflix
- A holiday movie on Hallmark/Lifetime/Great American Family that is now being sold on DVD
- A second use of a commercial (or a third use, or 300th use!)
- A TV series that is now being used on the internet as a “webisode” (a.k.a. “new media”)
- A TV series that is sold into syndication
- A network TV show that gets shown again on a cable channel, or on Hulu
In general, you get paid a session fee that allows the producer to show the film in one defined way. That is specified within your contract. For instance, the top of your contract will say whether a show is intended for Cable TV, Internet, or Network use. The contract will also say what union contract the project is being filmed under (SAG Ultra Low Budget, or AFTRA Uptown Agreement, for example). It is really important to know what union contract you are working with. If you don’t understand, call the union and ask! This type of contract determines your pay scale for the session fee, whether you get residuals at all, and in what circumstances you might get residuals. The unions now have so many different sub-contracts that it is really important for actors to ask questions! You can’t just assume you will be getting “union scale” because it is a “union project”.
This article contains basic information about residuals. For more detailed information, contact your union, SAG-AFTRA and ask for the residuals department.
Why do I NOT Get Residuals? a.k.a. Pitfalls to Counting on Residuals
You might find yourself NOT getting residuals in a few instances:
- It wasn’t a union job.
- You weren’t a principal performer (background players don’t get residuals).
- It WAS a union job but the advertiser agreed to an Upfront Contract with SAGAFTRA. If this is the case, you would have been paid a guarantee of $20,000, $8,000 or $3,825 depending on the contract.
- They aired it only once. In other words, a commercial might be produced for the Super Bowl, shown once, and never shown again (quite common). The talent would have gotten paid their session fee and that was the end of it.
- You were edited out of the project.
- You signed a contract that involved “Deferred Pay”. There are union contracts that allow producers to pay you when they sell the movie. Sounds good, right? Share the profits, right? Wrong. Most of the time, “deferred pay” is really code for NO pay. Very, very few (as in, we don’t know any), actors actually received deferred pay on the films they worked on. Nothing wrong with being entrepreneurial, but know what you are getting into.
- You signed an “alternative contract” within union jurisdiction. BEWARE! Examples of this include shows on Nickelodeon and Disney where they are paid on a “special” SAG-AFTRA contract called the Uptown Agreement. That agreement is a non-standard custom agreement with the union that allows them to pay less per session fee, and miniscule residuals. This equates to extremely low pay overall. The situation is particularly deceiving to child actors because we all know how those outlets run their episodes hundreds of times, so we assume that our child will make big bucks.The Uptown Agreement is used by both Disney and Nickelodeon. Nickelodeon’s version was renegotiated in 2017 to eliminate “exhibition windows” (the concept that allowed them to show an episode many, many times before residuals kick in). The SAG publicity is in this link, but details have not been forthcoming in public: SAG-AFTRA Press Release for 2017 Uptown Nickelodeon.
- Another alternative contract is SAG’s newer clause that says series regulars on network TV don’t get residuals for the first few runs of the show. So if your series doesn’t go past the first season, you likely won’t get any residual benefit.
- You were working on a soap opera. Many of them only show on the network once (with repeated airings on SoapNet). The pay structure for day time TV is very different and you might not make as much as you might expect from a primetime show on the same network.
- MANY (if not most) films don’t make it to theaters, even the union ones. They never get distributed anywhere. Maybe they make it to a festival, but that’s it (you don’t get paid for festivals). For you, that means no residuals. MOST pilots do not get picked up. They never make it to TV. That means no residuals. Some (not most) commercials never get put on TV. That means no residuals.
Moral of the story – Make sure you get as much as you can for a SESSION FEE. Don’t count your chickens before they are hatched. Don’t count on getting ANY pay later. Residuals are gravy.
Myths and Legends About Residual Payments
Be realistic! Get your session fee, and be happy. Don’t count on any more money. Don’t make decisions for the future (like buying a car, or using credit cards) with the assumption that you will be getting residual money for years down the road.
It is NOT TRUE that one commercial will pay for your child’s college education. Or pay for your pilot season trip. Those are myths. Lately, we have heard repeatedly about a Burger King Kids Meal commercial where the child reportedly made $75,000. It is simply mathematically impossible. Once in a blue moon a commercial will get cut into 10 different spots, each of which would pay as individual commercials. If some of those commercials ran for 3 years—that is the only way you could make 6 figures. And that is very, very unlikely in the age of social media targeted advertising and influencers.
It is NOT TRUE that a kid became a millionaire as a result of their first job on a feature film or their luck in booking a pilot. Most kids working on TV and film projects get scale, plus 10% for their agent. Their residuals add up over a lifetime, yes. And that’s wonderful. It’s why we love the residual system. But you would have to do a few films and work your way toward Jacob Tremblay status, or be the star of a TV series for a few years before you are financially secure. For an idea of one child’s experience, check out this 2022 article about Reece Thompson, who played the little Irish boy in Titanic. He discusses his residuals over 20 years: Titanic Film Residuals. Even though residuals are technically paid forever, a very general guideline is to plan for about 10 years. Since residuals are paid on a sliding scale downward, by the time you hit 10 years, you will likely be getting paid pennies for each showing.
Usually SAG-AFTRA holds the jurisdiction for commercials. In 2019, SAG-AFTRA negotiated a completely new payscale. Now employers may choose the “old contract” (a session fee and regular residuals, paid as the commercial is shown) OR they can choose from Upfront Use Packages.
In these packages, advertisers choose one of four tiers: Upfront Plus, Upfront Flex, Upfront Digital or Audio Flex. The largest is Upfront Plus and it is akin to the old “Class A Network” use — the kind of commercial you see on network TV shows, during primetime. It is essentially, unlimited use for a year. The upfront payment for an on-camera performer is $20,000. Residuals are $100 per use.
The next tier down from that is Upfront Flex and that tier is more about how they are going to use the commercial — there are separate, additional payments for Spanish, local cable, wildspot, etc. The upfront payment for Upfront Flex is $8,000.
Upfront Digital is primarily for internet use. Audio is primarily for voiceovers.
You can find a summary of the new contracts here.
Employers still have the option of choosing the old contract though. In that scenario, you get paid for a session fee (for the days you worked). A session fee is currently $783.10 per day. That session fee allows them to show a commercial ONE time for free. Beyond that, there is a sliding scale for each showing, and it depends on what city is it shown in. You will get paid different amounts for each type of use.
Here are some notes that might help:
- 21 months total use is allowed from the day you first work. That’s how long they can hold your image if they want to. If a commercial is still running (lucky you!) at 18 months, you need to remind your agent to renegotiate. Do not sign letters sent directly to you by the ad agency. It is usually an attempt to avoid negotiating with you. Renegotiations are where the big money is. Often renegotiations (meaning they get to use your commercial past the 21 month mark) involve 10x the session fee. That’s a lot of money. But it is also very, very rare to get a chance at renegotiations. When is the last time you saw the very same commercial on TV two years later?
- Commercials run in 13 week cycles, and then residuals start over with a new holding fee. Mark it on your calendar! Most commercials run two 13 week cycles or less.
- After you see the commercial on TV, residuals are paid about every two weeks. Since your agent or manager might have to process them as well, you can probably expect your first residual check about a month after the commercial airs.
- A holding fee is the amount paid to you to “hold” your image. It also ensures that you can’t take a job for a conflicting product (i.e. if you do a commercial for Coca –Cola, and they pay you holding fees, you can’t take a job for Pepsi or any other soft drink company). A holding fee is the same amount of money as your original session fee and is paid every 13 weeks as long as they choose to run or hold the rights to air the commercial.
- If they don’t pay you the holding fee, you are “released”. That means they aren’t planning to run the commercial any more. No more residuals for you – bummer. The good news is, you are “released” from that nasty conflict and you can look for a new job.
- Enlist friends and family to watch for you: time/date/station/city. Check the company website and social media. Then check commercial archiving sites like https://www.ispot.tv/browse or https://m.youtube.com/@CommercialBreak/videos
- Keep notes on where and when the commercial was shown. That really helps when you find yourself in a dispute about the way you were paid. Commercials are paid incorrectly a large percentage of the time. Why? Because advertisers know that you can’t watch TV and monitor it all over the country. So they take advantage.
Types of use:
- Holding fee—same amount as a session fee, paid every 13 weeks
- Wildspot (by unit)
- Dealer A – 6 month cycle which might be outside the 13 weeks
- Cable – (by unit) max: $3,906.00 *This is what most commercials pay now
- Class A Network – the big money, when the commercial is shown at the same time, same station, all across the networks (ABC, CBS, Fox, NBC). Paid for each use, getting smaller and smaller the more the commercial is run.
- Internet Use — this is also a buyout, and about $850 – $950 for 8 weeks and about $2500 for a year.
- Lifts vs. Edits – when a commercial has more than one version. Generally, one 15 second and one 30 second version are allowed for no additional pay. If the commercial seems to be different (and not just a shorter version) call SAGAFTRA. You might be owed more $$.
- Some products, like fast food kid’s meal toys, or holiday toys only run for a month or so.
- The payroll company is your employer—usually it is Talent Partners aka Extreme Reach.
- Problems getting paid? Call payroll first, then the ad agency. NOT the production company. The production company is who you may have had most contact with when you were filming, but they produced the commercial and then SOLD it to the ad agency. They are done with it, so they can’t help you anymore.
Theatrical (Television and Film)
It is pretty common to think you hit the big time when you book your first day on a TV series or your first feature film that shows at your local theater. It IS pretty big time! Congratulations! Unfortunately, the money may not be big time at first. And you have to wait awhile for it. Here are some notes on theatrical residuals:
No residuals for first showings, including all box offices. Residuals start when it is shown again anywhere in the world, any medium. For example: You got paid for your week’s work on Charlie Hunnam’s next film. Good for you! A year later, the film goes to the theatres. Woo hoo—it’s #1 at the box office! Sadly, you already got paid for that—it is part of your session fee (what the film was created for, a.k.a. ‘first use”). Six months after that (18 months after you worked), the film goes to DVD/Netflix/Amazon. About 6 months after that, you’ll get your first residual check! You’ll get paid again when it shows on premium channels like Showtime, HBO etc. Then you’ll get paid again when they show it on network TV and cable. Those will trickle in, year after year.The really great news? This process goes on FOR LIFE. You will continue to get paid smaller and smaller amounts each time the film is shown, forever.
If your film goes straight to a streamer (Disney+, HBO Max, Netflix, etc) but your original employment contract was done for a physical theatrical box office release, the established system gets corrupted and your income will be drastically reduced. That’s what happened when Scarlett Johansson sued Disney in 2021. Black Widow was released simultaneously on Disney+ and theaters during the pandemic. Her originally employment contract, negotiated many years earlier, was guaranteed a theatrical release and some of her income was tied to that order of operations. The lawsuit was settled because they wanted to work with her again, and because the company understood that their distribution move changed and it had the consequence of decreasing her income.
How do they figure out what you should get paid on a feature film?
It is a formula made up of the following 3 factors:
- Your rate of pay in the session fee
- How many days you worked
- How many other people were in the film? SAG takes those factors and assigns a value to you, called “units”. All the actors split up the piece of the pie according to the number of units they have. The “pie” is this: DVD/video = 4.5% of distributors gross, up to $1M, then 5.4%
Tip: Working a lot of days in a successful film with a small cast can really pay off. The more cast members, the less your cut of the pie is going to be. For a tip on where you are in the hierarchy of your film, look at the Day of Days sheet.
- Unofficial rule of thumb: you can expect the residual earnings in that first year to be AROUND what you got for the session fee when you worked. Give or take. Just to give you an idea. It seems to work out that way most of the time. Don’t hold us to it. Similarly, there is a general rule of thumb that you will continue to get residuals for about 10 years. After that, the sliding scale has slide into almost nothing.
- Residuals on TV shows are much better on primetime network (Fox, CBS, NBC, or ABC), than they are on cable. Much!
- For TV shows on DVD, a similar formula is used: Actors split 3.6% of the distributors gross, based on units of time and salary (5 days work = 1 unit, 15 units max). So imagine…you worked a week guest star on Modern Family. They release a season compilation DVD. Your cut of that is TINY, because it will include all the series regulars, and every other actor who ever appeared in the show all season. You might be able to buy yourself a Starbucks coffee with that residual check.
- Theatrical residuals are paid quarterly to SAG-AFTRA. They “process” them (no one knows exactly what they do) and they send them out to talent several weeks later. SAG-AFTRA does have a residuals tracker, but it is not very timely. Make sure SAG-AFTRA has your correct address!
- Check the SAG-AFTRA pension and health site for a more up to date listing of checks issued.
- Studios withhold 25% standard taxes on residuals. Coogan may or may not be with held (it is supposed to be, but often is not) so parents are responsible for depositing.
Where Do They Send the Money?
Commercial residuals are usually sent to your agent, then forwarded to a manager (if have one). They each take their percentage and send you the rest.
TV/Film project residuals are usually sent to the union. The union processes them, and then sends them on to you (often weeks or months later). You are responsible for paying any agent or manager commissions, as determined by your contracts with them.
What Do I Pay My Agent?
That is a loaded question! The answer depends on what contract you signed with your agent. If you signed a General Service Agreement, the agent will likely commission all your residuals (which can add up to tens of thousands of dollars over a lifetime, a significant disadvantage to GSAs). If you signed a SAG or AFTRA agreement with your agent, the union limits which commissions are “commissionable”. Even within the SAG-AFTRA structure, there are some twists and turns: SAG and AFTRA merged in 2012 and they are still working on the equalization of what is commissionable and what is not. Employment contracts (not agent contracts) before the merger are referred to as “legacy contracts” and they are still around. Here is a page of what is commissionable under their rules.
Miscellaneous Tips About Residual Payments
Unemployment in California: The good news is that residual payments count toward your earnings in determining the amount of unemployment you might get. But you can’t use residuals as work days. And you must report any residual payments on your UI claim form (see article on Unemployment on this site).
When you turn 18, make sure to notify all your employers, so they don’t keep with holding Coogan from your residuals. Lots of Coogan money goes missing this way, since the residual system is not set up to track children and their Coogan payments. If you think you might be missing any Coogan money as a result of getting residuals, check www.unclaimedcoogan.org.
Unclaimed Residuals. Since residual payments happen over a lifetime, lots of money gets lost in the shuffle. Check here to see if you might be missing money:
Click HERE to Watch the 2021 SAG-AFTRA Webinar with Jennifer Gaudy. We highly recommend! Understanding Residuals for SAG-AFTRA Performers
The Essential Guide to SAG Rates (lists union minimum daily rates for each kind of contract) by Wrapbook (a payroll company for producers)
SAGAFTRA 2019 Commercial One Sheet — Explains Upfront Payments (most current negotiation). Make sure to scroll for cable and wildspot residual formulas
Powerpoint by SAGAFTRA from Residuals Information Meeting explaining their processing of residuals
Goals: Six People Who Have Made a Fortune by Acting in Commercials, by Seamus Kirst in Forbes Magazine
SAG Owes $48 Million to 96,000 Actors It Can’t Find by David Robb, Deadline