 What are royalties and how do authors earn them? Authors who pursue traditional publishing are usually paid an advance against earnings by their publisher when the publisher signs the work. Once a book earns enough money through sales to equal the amount of the advance, referred to as “earning out,” proceeds from the sales after the advance is earned out then get paid to the author in the form of royalties. Royalties are great because they’re basically free money for the author. Not every dollar a book makes after earning out the advance goes directly to the author, however, because publishers need to pay their expenses to stay in business. How much an author earns in royalties is spelled out in their contract. For print books, they usually earn 10-15% of the cover price, though this can vary by publisher, genre, and format. On e-books, the industry standard is 25% of net. Let’s look at an example of how an author can earn royalties: A writer, let’s call him Dean Winchester, signs a one-book deal for his mystery novel with Hunter Publishing, LLC (not a real publisher). Hunter Publishing pays Mr. Winchester a $20,000 advance against earnings when they buy the rights to his book. Mr. Winchester’s contract states he will earn 10% of the cover price on each hardcover copy of the book sold. The book will sell for $30. At a 10% royalty rate based on the cover price, Mr. Winchester earns $3 per book. To earn out his $20,000 advance, he has to sell 6,667 copies. The royalty magic happens the minute someone buys copy number 6,668. Since Mr. Winchester has now earned out, that $3 per copy goes directly to him. As long as the book is in print, he’ll earn $3 per hardcover sold. If Hunter Publishing has the rights to sell the book in formats other than hardcover, such as e-book or audiobook, then the proceeds from every copy of the book sold in any format help Mr. Winchester earn out his advance. This means he can start earning royalties faster, since earning out isn’t solely dependent on hardcover sales. He’ll also earn royalties on every copy of the book sold in those other formats. It’s true that most authors can’t live on their royalties alone, but an extra check every now and again for doing no additional work never hurt anyone.  Carlie Webber is a certified professional editor and former literary agent who holds an MBA from Pepperdine University's Graziadio Business School. She works with new and established authors of fiction (all genres), YA, middle grade, and memoir. She can be reached at [email protected].  Attend a Writers Conference in 2026:
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