You SOLD YOUR STORY! That’s super exciting! Your novel was sold! And now the Business begins (sidenote: the business began the minute you sent your novel out for submission). In this area your Agent will be invaluable. They act (as we discuss in other topics) as your advocate, to ensure that you are working out the best deal possible with the publishing company.
So how does this whole payment thing work, you ask. It’s a little complicated. I begin by directing you somewhere else. Justine Larbestier has a really great essay about first novel advances HERE. Which was agreed upon and expanded on by John Scalzi (he’s a SFF guru, peer reviewed, reviews the peers, etc). HERE.
Your publishing deal will possibly come with an Advance. This advance is the publishing house fronting you a portion of what will be your Royalties. Royalties are the percentage of each book sale that you, as the author, are contractually entitled to. This is laid out in the contract you signed. The Advance will be based on a number of factors, including what the publisher believes your sales will be.
Generally you will be paid in installments. Sometimes you will be paid when your sign the contract. Sometimes you will be paid when the manuscript is accepted by the editor. Other times you will be paid upon your book’s publication. Again, this will be (you guessed it) outlined in the contract that you signed, that your agent negotiated. The funds will be sent to your Agent (per your contract with the publisher and the agent). The Agent will take their percentage that you have agreed upon for their effort (generally 15%) and will send the rest on for you. Keep in mind, too, that in some instances a large Advance will be paid in installments over the course of a year or more. Do the math before you buy your Dream Castle and because you got a big advance.
You will not earn additional money until your Advance is paid off. This is called “Earn Out”. Some books do not Earn Out their Advance. This is not the end of the world for your publishing career, but it is less than ideal. Should you Earn Out your Advance, you will be paid per your contract (generally quarterly). These funds are sent to your agent. The agent will take their percentage (generally 15% of the royalties) and then the remainder will be sent to you.
One last thing about this whole money situation. You will notice that at no time were taxes taken out of either your Advance or your royalties. You will need to pay taxes on your income. This will require a level of expertise that we will not cover in this particular article, but is something you should be aware of as you enter the field. Happy Sales!
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