How Performers’ royalties are calculated
Royalty payments are calculated by ACTRA PRS on a production-by-production basis for each performer. Once a producer or distributor remits 3.6% of their gross revenue to ACTRA PRS, we begin to calculate the amount each performer receives as a royalty payment based on the following formula:
We take the minimum daily rate at the time of production and divide it into a performer’s gross fee earned for the production. This gives us the number of units assigned to each performer (of which a maximum of 20 will be allotted any particular individual).
Adding the number of units allocated to each performer in any given production gives us a total number of units for the production in question.
We then divide the total number of units into the dollar amount received from the producer or distributor for a given production to determine the dollar value of each unit.
The dollar value of a single unit is then multiplied by the number of units as calculated in Step 1. This gives us the dollar amount allocated to each performer who appeared in the final cut of the production. Deductions for dues, performers’ insurance and retirement contributions and service charge are taken from this amount; the resulting amount is the residual payment due to each performer.
All calculations are first verified against the original remittance forms for each performer to ensure their daily rate.
Before “Units” are calculated
When an initial Prepayment period purchased by a producer at the time of production has expired (ie. after the fourth year under the current IPA), and a producer or distributor continues to generate revenue from the production, they are required to remit 3.6% of this gross revenue to ACTRA PRS. It is this amount from which we begin to calculate the dollar value of each unit.
Revenue generated from the first four years of prepaid use does not form part of the 3.6% payment; only revenue created following the expiration date of the prepayment period is subject to 3.6% of the producer/distributor’s gross revenue.
That being known, the dollar amount of each unit can vary greatly depending on amounts remitted to PRS from a producer.
Why PRS uses the ‘Unit Calculation’ method
This formula has been integral to PRS since it first appeared as part the IPA in 1980. The unit calculation process is important as is allows a residual structure to exist which is a reflection of a performer’s original payment, performers to share in the continued financial welfare of the production.
There are several factors which will influence the amount a performer will receive as a royalty payment. No two productions are alike, even if a performer’s contracted payment amount was identical on two separate productions, their royalty amounts can be very different. Simply put, royalty payments depend on how much revenue the production is generating and how much the performer was originally paid.