If you’re thinking of becoming an author you might be wondering how authors get paid.
While not everyone is primarily in the book-writing world to make money, the income is rarely unwelcome! But what kind of financial compensation is available to authors? What are the different forms it takes? And how do self-published writers get paid in comparison to those in the traditional world?
By discovering the answers to these questions, you’ll have a better idea of whether the author life is one you wish to pursue, and what your eventual rewards might look like.
This answer to the question ‘how do authors get paid?’ covers:
- Payment types for authors
- Net receipts
- Fixed fee
- Self-publishing income
- How much do authors get paid?
- How do self-published authors get paid?
- How do traditional authors get paid?
- How do authors get paid – traditional vs self-published
Get ready to delve deeper into the world of author payments!
Payment types for authors
If you’re new to the world of author payments, the terms might be a little unfamiliar at first.
While most people are familiar with concepts like salaries and hourly wages, royalty rates and advances might be a little less close to home.
Some of the most common payment types for authors include:
Book royalties are payments that authors receive depending on the number of copies of their work sold. This is typically a percentage of the revenue generated by each copy.
We’ll explore the ins and outs of royalties a little later, but for now, just know that traditionally-published authors receive a smaller percentage royalty rate than self-published authors, and traditional authors must also cover the amount of any advance they have received before qualifying to earn royalties.
Net receipts are an even less-favorable type of compensation for traditionally-published authors than royalties.
Imagine, for example a traditional author earns out their advance and then sells their paperback for $10 a copy, receiving a 10% royalty rate. They would make a dollar a copy.
However, book retailers commonly demand a discount on the list price when buying from publishers.
Let’s use the same imaginary author as above, except this time his $10 paperback was purchased by the retailer at a rate of $5 per copy. So, instead of 10% of the retail price, the author will receive 10% of the net receipts, namely the money generated by the publisher, which in this case would be 50 cents per book sold.
Some authors get paid on the basis of a flat, fixed-fee payment in exchange for the delivery of their book. This takes away any uncertainty for the author but also means that if a book becomes a smash hit they will have been vastly underpaid in relation to how much money the book generated.
The famous traditional-publishing advance is one of the things, other than the bragging rights, that leads many aspiring authors away from self-publishing. It’s imagined that a nice lump sum payment leads to a life on easy street. However, many authors don’t receive advances, and those that do often receive a lot less than people tend to imagine. On top of that, the author will receive no royalties from the book until the advance has been covered by sales. An advance cab therefore lead to a situation of uncertainty and financial instability.
Self-published authors get paid in a way that’s a lot more easily understandable than most traditional publishing contracts. They sell their book on a platform like Amazon. They then receive the majority of the revenue from each copy sold, after the retailer takes a small, fixed fee. There is no uncertainty. Sell x number of books and receive x number of dollars.
How much do authors get paid?
So now you know the types of payments authors get when they sell copies of their book, let’s check out the typical income level for writers and authors.
According to the US Bureau of Labor Statistics, writers and authors generated a median level of pay of $69,510 in the year of 2021. Demand for the profession grew at around 4% which is in line with typical changes in job demand for that time period.
Of course, these stats refer to the median level of pay for writers of all types. In order to get more detailed insight related to authors specifically, we need to take a look at actual pay rates for traditionally-published and independent authors alike.
However, these stats are useful for establishing that writing is not on the decline and the median income it generates would be enough to meet many people’s needs.
How do self-published authors get paid?
In the first section of this guide, we took a look at the common types of payment for authors, including royalties.
In this section, we’ll look in more depth at the specific royalty rates self-published authors receive.
- If an indie author sells their book on Kindle at between $2.99 and $9.99, they receive a royalty rate of 70%.
- A ballpark average royalty rate for self-published authors taking into account paperbacks and so forth is 40-60% of sales.
- Self-published authors typically pocket around 20-40% of the retail price of their audiobook.
- Self-published authors earn full control and therefore all income generated by their foreign marketplace rights.
If you’re thinking about becoming an author and selling your book on a particular platform, it’s worth checking out their rates in particular than these rates in general so you can work out what you’ll get paid.
However, these are good ballpark figures to work with and provide a useful means of comparison for the traditionally-published author figures we are about to share.
How do traditional authors get paid?
So what’s the picture like for traditional authors? Let’s take a look at their approximate royalty payments for different types of sale:
- For audiobooks sold, traditional publishing contracts often specify around 25% goes to the author.
- Traditional publishers tend to pay their authors around 25% of the revenue generated by ebooks.
- A mass-market hardcover sale leads to a royalty rate of between 10 and 12.5% for the author.
- Mass-market paperbacks, the type of books most commonly sold, generate a royalty rate of only about 5% for traditional authors.
As you can see, the general royalty rate for traditionally published authors is lower across the board.
Let’s finish by directly comparing the way indie and traditional authors get paid.
How do authors get paid? – Traditional VS self-published
To summarize, there are a few key facts to keep in mind when we consider the question of how do authors get paid:
- Self-published authors invest in their own book upfront while traditional authors forego the need to invest in exchange for more restrictive terms and lower rates of payment.
- Traditionally-published authors receive their royalties at a lower percentage rate than self-published authors and only qualify for them after repaying any advance they have received in full.
- Self-published authors have the full freedom to distribute, translate, and sell their work in any nation or format they please – traditional authors forego these benefits.
Hopefully this article has demystified the day to day situation of how authors get paid.
It’s clear that there and pros and cons to both forms of publishing, but for the vast majority of authors, self-publishing is a far more profitable path that also providers a far higher level of creative control. x