How do authors actually make money?
For those of you who want to be professional writers, you might be wondering how much an author makes. Well, that’s not an easy answer. It differs from one author to the next. But I can give you a little insight into how authors make their money…
Advances Vs Royalties:
An advance is the money paid to from a publishing contract. For instance: you get a lump sum on signature, and then another lump sum on delivery of your manuscript, and another on publication. That’s where the bulk of an author’s income comes from.
By comparison, there are royalties, paid to you by the publisher when your book sells. The percentage changes between paperback, hardback, and ebook. Say you get 7% from a paperback, and let’s say that’s 10p per book (to make the sums easy). If your advance was £1000, you’d have to sell 10,000 books to earn out your advance. You don’t earn money from royalties until you earn out your advance. So yeah, you need to sell a LOT of books to make a living wage from just your royalties.
You might like this post on how traditional publishing works.
Oh, and agents take a cut.
If you have an agent, they’ll take a percentage of your advance and your royalties – basically any earnings from the sale of your books. That’s how they make their money.
Again, this is a bit like advance vs royalties. You’ll earn a lump sum from translation rights sold, and then you have to earn that back before you can earn royalties from your translated books. And agents get a cut of that usually too.
Same goes for dramatic rights – like, if your book is optioned as a TV series or a movie or something. You get a lump sum, and then later may earn a percentage from profits.
Events and School Visits
Sometimes you’ll be paid for various events and school visits. You’re within your rights to set a fee for any visits you do – the Society of Authors has a great page on what to charge. I usually haven’t charged for school visits because I didn’t know I was allowed to. At the least I’ve usually had expenses reimbursed, and lunch. I’ve charged for various events – like a panel I did with Coca Cola.
Fees can range from £150 to over £1,000 per day depending on the author and what they choose to charge. Plus expenses.
For instance, I wrote a piece a while ago for The Guardian online, and was paid a standard fee for that.
This stands for Public Lending Rights – you sign up to PLR on their website as an author, declare your books, and then whenever your book is taken out of a library, you earn money from it! The first year I signed up to this, it only covered a few months of my novels, and I earned like £3.80 – enough to cover a wash AND a tumble dry in my uni halls! But this last year it was closer to £250ish, which is pretty nice.
And you usually have to pay tax.
Unless you’ve earnt below the threshold (I think it’s about £10,000?), you have to pay tax. You have to declare it as self-assessment and you can claim back agent’s fees and expenses sometimes. I mostly leave this one to my accountant – but I’ll be doing an accountancy qualification in my grad job, starting September, so may end up doing my own in the future…