A Central Withholding Agreement is a contract between three parties: a non-resident athlete or entertainer; a paying/withholding agent representing the athlete or entertainer; and the Internal Revenue Service. This contract presents the IRS with a budget for a tour or event, including an estimate of expenses that will be paid by the entertainer or athlete. The IRS reviews the contract and informs the withholding agent of the amount to be withheld based on NET earnings projected rather than GROSS earnings, using the same graduated rates afforded to U.S. citizens and residents.