Residual payments can be an important part of income for entertainment professionals. Understanding how they fit into your budget can help you make the most of that money.
For actors, writers, directors, and other entertainment professionals, residual payments can be an important source of income, especially between projects. But because residuals can vary in amount and timing, knowing how to budget for them can make irregular income easier to manage.
Residuals can vary depending on your role, the type of production, your contract or union agreement, and where the material is being reused.
Sometimes residuals are regular payments for that sitcom that made it into syndication. Sometimes it’s a smaller amount from a streaming service or a movie that ran on a network.
Either way, it’s your income. Planning for residual income alongside your other earnings can make it easier to build a budget when your paycheck changes from month to month.
Learn more about building a budget as a freelancer.
What are residuals?
Residuals are payments that eligible entertainment professionals may receive when a film, television show, or other covered production is reused after its initial release or exhibition. Both SAG-AFTRA and the WGA have agreements that provide for residual payments to eligible members under certain circumstances.
For a movie that had an original theatrical release, residuals may be generated when the project is distributed through additional markets or platforms, such as television or streaming. For television shows, that can include reruns, syndication, and streaming.
How residuals are calculated and when they are paid can vary based on the production, distribution method, applicable union agreement, and individual contract.
Who is eligible for residuals?
Residual eligibility isn’t the same for every entertainment professional or production. Depending on your individual contract, union agreement, role, and the specifics of the production, eligible creatives may include:
- Principal performers
- Professional singers
- Stunt performers and coordinators
- Directors
- Credited writers
- Puppeteers
- Dancers
- Unit production managers
- First and second assistant directors
Eligibility and payment schedules can vary considerably, so your applicable union agreement or contract is the best source for details about a specific production.
How do residuals impact your income?
Residuals can make an already-variable entertainment income even more unpredictable. The key is knowing whether your residual payments are consistent enough to include in your regular budget or irregular enough to treat separately.
If you regularly receive substantial residual checks, look at your payment history before deciding how much, if any, to include in your monthly income. Base your budget on what you can reasonably expect rather than assuming every residual payment will continue at the same level.
If your residual checks are more sporadic or smaller, consider treating them as irregular income rather than money you rely on for recurring bills. They could provide an opportunity to make an additional payment toward credit card balances, auto loans, medical debt, or student loans, or to add to your savings.
How to budget for residual income
If you’re not sure where residuals fit into your budget, start by looking at what you’ve actually received over the past year.
Ask yourself:
- How frequently have I received residual payments?
- How much have the payments varied?
- Do I rely on residuals for regular expenses
- Would part of this money be better directed to savings or debt?
- Do I need to set aside part of the payment for taxes?
Looking at residuals as part of your larger income picture can help you make a plan before the next payment arrives.
Take some time to review your previous and anticipated residuals and determine where they best fit into your budget. The goal isn’t to avoid enjoying that unexpected check. It’s to give the money a purpose before you spend it, whether that’s covering expenses between gigs, building savings, paying down debt, or leaving a little room for something fun.
For entertainment professionals navigating project-based and irregular income, residuals can provide some breathing room between paychecks. Understanding how they fit into your overall financial picture can help you make more intentional decisions when the next payment arrives.
Frequently Asked Questions About Residuals
What are residuals?
Residuals are payments that eligible actors, writers, directors, and other entertainment professionals may receive when a covered production is reused after its initial release or exhibition. This can include certain television reruns, syndication, streaming, and other forms of distribution depending on the applicable agreement.
Who gets residuals from movies and TV shows?
Eligibility depends on factors including the performer’s or creative professional’s role, contract, production, and applicable union agreement. Certain performers, writers, directors, stunt professionals, and other covered entertainment workers may qualify.
How do residuals impact your income?
Residuals can supplement income from your current projects. If payments are predictable, they may be factored into your broader budget. If they’re inconsistent, it may make more sense to treat them as irregular income and use them for savings, debt repayment, or other financial priorities.
Are residuals the same amount every time?
Not necessarily. Residual payments can vary based on factors such as the production, how and where the content is reused, and the agreement governing the work.
How should I budget for residual payments?
Start by reviewing your past residual payments to understand how frequently they arrive and how much they vary. If they’re inconsistent, consider building your regular budget around more predictable income and deciding in advance how you’ll use residuals when they arrive.
Why are residuals important for creatives?
Whether you’re in the writers’ room, in front of the camera, or working behind the scenes, your project may continue generating value long after its original television airdate or theatrical release. For eligible entertainment professionals, residual income can provide additional financial flexibility between projects or during periods of irregular work.
