When is Deferred Compensation Paid Out for Film?
The film industry frequently engages in deferred compensation plans. When it comes to performance contracts for films and video. In fact, many performer agreements involve a deferred payment agreement. In which performers do not receive payment. Or in which they only receive a partial payment. Until the terms of the initial deferred compensation agreement are met. But, when is deferred compensation paid out for film workers? And what does this mean for a worker’s tax liability?
What is Deferred Compensation?
Deferred compensation represents an agreement made between the producer and the performer. In which a statement is made under the agreement that X will be paid when Y is complete.
Under a deferred compensation agreement, the deferral of payments may be until the production recuperates a particular investment of costs involved in the production. Or it could be deferred until some other event.
The primary consideration is that when deferred compensation is paid out for a film will depend solely on the agreement that was made upfront. Before signing the performance release and any related production agreements involved.
When is Deferred Compensation Paid out for Film?
So, what every actor, performer, or crew member wants to know is, “When is deferred compensation paid out for film workers?” At the end of the day, after all of the hard work is put in on set, payment represents one of the most satisfying areas of the production.
Naturally you want to know when you’ll be paid for the work that you complete. Especially when there is a deferred compensation agreement.
In Actuality
The reality is, a deferred compensation plan might result in your being paid out for your work in a film several weeks, or months later. In fact, you could wait years for payment and you might never get paid.
It really all depends on the agreement that was written in the original contract. Which you should have signed before you engaged in performance for the film.
Profits Made
Most of the time, deferred compensation will be paid out when the project itself becomes profitable. This means that you will have to wait.
Until a particular amount of funds are generated from the proceeds. Ones involved in sales of tickets to view the film in theaters. Or following the sales of DVDs that allow the film to be viewed at home.
Keep in mind that deferred payments like this, based on the success of a project, could mean nobody gets paid. In fact, the potential for this outcome is very likely should the film be a failure.
Is Deferred Compensation Right For Me?
So, now that you know when deferred compensation is paid out for a film. And you know that it’s incredibly important for you to read up on your deferred compensation agreement.
Just to ensure that you don’t sign away your rights to payment in the future. You can begin to make a decision as to whether or not a deferred compensation agreement is right for you.
If you’re someone that’s needing to be paid upfront for your work? Or if you can’t afford to wait and see if a film is a success before you get paid. You might want to reconsider a deferred compensation plan.
In Summary
However, many look to this opportunity as a means of saving on tax liability by extending out their payments into the future so that they can equally extend their tax liability, too.
In the end, deferred compensation will be paid out according to your agreed upon terms, so it will be very important for you to read and understand the terms of any agreement that you make before you get involved in a production.
