Film Accounting Glossary
Qualified labor
What is qualified labor?
Also called qualifying labor, or eligible labor.
Qualified labor is the portion of a production's wage spend that counts toward an incentive claim, defined by each program in terms of residency, work location, and sometimes role and salary caps.
Programs commonly pay a higher credit rate on resident labor than on non-resident, and many exclude above-the-line wages above a threshold entirely. Because the test is per person and per dollar, payroll has to capture residency and work state at hire, not at claim time.
Example
A program pays 30% on resident wages and 20% on non-resident, and excludes above-the-line salaries over $500,000. Of $3.2M of wages, $2.1M resident and $700,000 non-resident qualify, and $400,000 of a director's fee does not.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Tested per person and per dollar, so payroll has to capture residency and work state at hire rather than at claim time.
Common mistake
Treating all crew wages as qualifying. Residency, work location, role, and salary caps all narrow it, and each test is applied per person and per dollar.
Related questions
- What makes film labor qualify for an incentive?
- Usually residency in the jurisdiction and work performed there, subject to program rules on role and salary caps. Non-resident wages often qualify at a lower rate or not at all.
- When should residency documentation be collected?
- At hire, as part of start paperwork. Reconstructing it when the claim is assembled is how qualifying labor becomes non-qualifying at audit.