How Authors Get Paid

I am surprised sometimes at how mysterious it seems to those outside of the publishing world how authors get paid. But maybe if I weren’t in this world myself, I wouldn’t understand it, either. To the basics:

1. Authors Get Paid Royalties. This means that they get a percentage of books sold new. Not checkouts from libraries (in America). Not reused books.

2. Authors Get Paid Advances on Royalties. Sometimes. This means that the publisher estimates how many copies will sell, and pays the author this much money up front.

3. Authors Get Paid for Appearances, etc. If you pay them and if you invite them. Authors you do not invite for school visits or appearance do not get paid. Authors who come for free do not get paid.

4. Authors Get Paid for Movie Rights or Other Subsidiary Rights. Sometimes even if movies do not get made, authors get money. But for the vast majority of authors, these rights do not exist.

5. Authors Get Paid for Translation Rights. If the translation is done by a legitimate publisher that bothers to pay them.

This all sounds perfectly obvious, right? But a lot of people I talk to think that authors get paid a lot more than they actually get paid. This is partly because of a wide variety of misconceptions, such as:

1. Publishers Pay Authors just for being authors. This doesn’t happen. If books aren’t being sold, authors are not being paid. No authors get paid for sitting around being authorly.

2. Authors are selling lots and lots of books, a hundred thousand or more. No. Most authors are lucky if they sell about 5,000 copies of a book.

3. The percentage of cover price an author makes on a book is a lot lower than you think. Ten percent is good for most contracts. And there are a lot of exceptions. Books given away for free in promotions don’t count, etc.

4. Me personally getting a pirated book for free won’t hurt anyone. The publishing world is becoming more like the music world, where the artists who make money are the ones who tour and charge for live appearances. I don’t think this is a good thing.

5. Authors who splash in the news for big advances are making less than you think. An author who sells a three book deal for $1 million is probably making less than an accountant. This is because that deal is divided into chunks over years, some of it may never happen, and there are a lot of expenses involved in being an author at that level, including traveling expenses, assistants, publicity people, and an agent—which comes directly out of the author’s pocket. Not to mention health insurance costs (insuring yourself is a nightmare and expensive, even now). And self-employment taxes, which no one but the self-employed really understand, and which is why most people try to avoid being self-employed like the plague. You pay 40% in the lowest tax bracket for self-employment tax.

6. Authors who get big reviews or are subjects of newspaper/internet articles are not paid for this. (In fact, it may sometimes be the reverse.)

Look, I don’t think ebook piracy is going away anytime soon. I don’t think being vigilant on my part is going to help. I doubt my telling you to stop doing it is going to be more than a drop in the bucket. I’ve given up on that point.

But it’s useful for people outside of the publishing world to understand how authors get paid so that they don’t think it is some magical thing that happens that they don’t have to think about. This isn’t about guilt. It’s about informing you so you can see the truth more clearly.

Authors get paid by the books they sell. Pure and simple. This is why authors often turn down opportunities to appear at events where they can promote their books but aren’t being paid anything. Child care costs alone can be prohibitive. Authors whose books you buy remaindered at B&N aren’t getting paid for them. It’s sad, but true. Authors whose books you buy on a big promo aren’t (often) getting paid for them, either. I’m not saying it’s bad for them, but it’s not the same thing as money.

Authors are often shy people, not used to publicity and attention. It’s weird, then, that for many of us, the only way to make a living is to become a celebrity and charge for personal appearances. I don’t like it, but I think it’s a reality that authors are having to start to face as the industry changes.