The Wage Breakdown: Where Does the Money Go on a Film?

When you hear what a film costs, it’s baffling to understand how budgets are made and how funds are allocated. With budgets often reaching millions (or even hundreds of millions) of dollars, understanding how funds are allocated can feel like unraveling a mystery. 

Wages typically account for 30-40% of the total budget. For example, in a $10 million budget, $4 million would go to wages. The remaining $6 million is spent on various production essentials such as visual effects, locations, set design, equipment rentals, and post-production.

A budget is broken into two major categories: Above-the-Line (ATL) and Below-the-Line (BTL) costs. Though many agree that separating it via a “line” can be dismissive to the incredibly creative collaborators who work across that line, it’s important to understand why this is industry standard.

How does this break down, you wonder? Here’s a very macro overview:

Above-the-Line (ATL): Creative

ATL expenses typically account for 25-35% of the total wages. This category includes the creative minds and talent who shape the vision of the film during its development and pre-production phases. Here’s where the big bucks go:

• Directors: As the captain of the ship, directors often receive a hefty paycheck. Their salaries can range from tens of thousands to millions, depending on their track-record and the project’s scale. For instance, a high-profile director may take home 5-10% of total wages. Remember though, these individuals often work on the film for years.
• Producers: From cradle to grave, producers oversee everything from development, to financing, to physical production, to distribution and marketing… and everything in between. Fees are often negotiated as either a flat rate or a percentage of the budget. Producers typically only get paid when a project goes into production, however, while fees may seem high, you have to consider the years they spend working on the film in relation to their earnings.
• Writers: Pay varies widely based on whether screenwriters are penning an indie script or a blockbuster screenplay. It also depends on if the writer is WGA or not, as the guild has minimums. Writing costs alone can take up 2-5% of total wages.
• Talent: The stars of the show often command significant salaries, sometimes taking up 20-40% of the total wages, especially for big-name actors.

In short, ATL is all about paying for creativity, leadership, and star power. These individuals set the tone and direction for everything that follows.

Below-the-Line (BTL): Production

BTL accounts for the remaining 65-75% of the total wages. It covers all the hardworking crew members and technical resources that bring the director’s vision to life. It includes everything from camera operators, lighting technicians and costume designers, to sound engineers and grips.

The production assistant often earns the most entry-level wage on a show, which is likely minimum wage. As of January 1, 2025, the minimum wage in Los Angeles is $16.50 per hour. On top of the base rate, taxes can account for an additional 25%, but this varies significantly state to state, as do the state caps on total earnings the taxes are applied to.

You can see how this easily adds up when you factor in all the prep, shoot, and wrap days multiplied by the number of PAs you’d need for a smooth show.

When a show is union, there are additional contributions in pension and health on top of the state and federal fringes to account for.

The following breakdown illustrates a typical distribution of labor expenses for a $10 million film budget.

The remaining $5,000,000, which accounts for 50% of the total budget, would be allocated to various expenses including locations, transportation, sets, food and lodging, insurance, and post production.

When trying to reduce the budget, the first areas impacted are often locations, visual effects or planned stunts, the length of the shoot, and special equipment, as these categories can have an exponential impact on the overall budget.

It’s tempting to remove or reduce contingency all together when trying to back into a budget number. However, this is not recommended. It’s crucial to have money set aside for the inevitable unknowns of production.

Understanding the hard costs of a film - regardless of how much you can stretch a dollar - is empowering. This knowledge will allow you to balance creative expectations with the real costs of paying all the people needed to make that vision a reality.

The Three Takeaways:

✔️ When hiring A-list ATL talent, costs may need to be trimmed elsewhere to stay within budget.

✔️ Investing wisely in BTL hires, especially your department heads, ensures your production team has the experience needed to deliver quality work on budget.

✔️ Keeping contingency funds (10%) allows flexibility for unforeseen expenses like reshoots or equipment failures.

Unlike other art forms, filmmaking is a collaborative effort where every dollar plays a role in bringing stories to life. ATL represents the visionaries who dream it up, while BTL embodies the skilled hands that make it happen. Balancing these costs is both an art and a science —and when done right it results in cinematic magic.

So next time you watch a movie, sit through the credits and marvel at the sheer number of talented folks working behind the scenes to create that magic.