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WORDS FOR WRITERS: How do writers get paid?

While we all became story tellers because we had something in our hearts we want to share, there are a lot of us writers who also want to turn this into a career.  There are likely lots of you dreaming of massive advances and comfortable (if not Rowling-levels) of wealth, so let’s break down where that money is actually going to be coming from.

Buying and Selling

Firstly, some clarification about what happens to your intellectual property (hereafter “IP”) when you exchange money for the right to print it.

At no point – unless you specifically sign a contract stating so explicitly – do you loose control or ownership of your IP. While we use terms like “buying” and “selling”, it’s more appropriate to call it “leasing” your story. In Canada, you own the copyright to your IP the moment you put pen to paper. In the USA, you have to register copyright to the IP. I’m not sure about other countries, but take a look at what your local copyright laws are, and if a guild or union offers discounted registry services.

A publisher pays you for the right to publish your IP (usually presented as a completed manuscript), in specific format(s), on the understanding that you are contractually bound and may not give another publisher the right to do the same. This includes posting it yourself on your website, or on story sharing platforms like Wattpad.

In return for this right, the publisher uses all of their own money to create the product (i.e. a “book”, an “ebook”, or an “audiobook”), and gives you, the author, some money in return for this lease. This money will come in the form of an outright payment, or a royalty – more on that later.

If you or the publisher elect to do so, you may terminate your relationship prior to the product being created (in which case you’ll likely have to give them back some or all of the money they gave you), after the publication of the product (in which case, you may have to pay them for the right to take your IP back and let another publisher use it, depending on what’s in the sunset clause in your contract), or, there maybe a natural end date in the contract (which means you get to keep all your money and get back the right to lease your IP elsewhere).

It’s very common for short stories to have a One Year From Publication end date: you the author get the right to take your story and publish it elsewhere only after one year from the first publication of the story. Sometimes novel contracts have this too – there’s a four-year end date on my fantasy novel series. #1 and #2 have actually expired, so I can take them elsewhere at this point if I like without owing my publisher any money. But novels #3 and #4 haven’t expired yet, so I’m allowing the publisher to keep publishing (and making money) from #1 and #2 at this time. And of course, I still get royalties for those sales.

Some contracts don’t have expiry dates, and instead have sunset clauses by which the author may request thier rights back if the publisher breaks another clause, or if there are very limited sales of the book, or just if both parties choose to part ways. But in all likelihood, if you’ve signed with a professional publisher – and especially if they’re one of the Big Five – then you’ll have no expiration date and no reason to invoke the sunset clause, and so your book will continue to be available ad infinitum, and you’ll keep getting paid for as long as copies sell.

The #1 rule of publishing is this: Money should always flow toward the author, never away.

And speaking of money…

Per Word

In the world of short stories, you get paid for your story in one of two ways – per word, or per story as a whole. The Science Fiction Writer’s Association has set the current market rate for short stories at eight cents per word. That doesn’t seem like a lot, but that means a 5k story would be worth $400. Professional Markets must pay at minimum eight cents per word to be considered so by SFWA.

Each different market (romance, fantasy, literary fiction) will have different associations and expectations. But the SFWA rate tends to be the best litmus test of what a per word rate should be.

Per Story

Not every market can afford to pay professional rates or prefers not to go by-word, so they’ll offer a lump amount per story, no matter the length.

I sold my first tale for $10 USD flat. There are low/no pay publishers out there, and unless they’re actually predatory and listed on Writer Beware, they’re not selfish, they’re just unable or unwilling to pay at market rate. It’s up to you, at that point, to decide if the publication of one of your stories, in that particular publication, at this particular point in your career, is worth it to you.

At the start of my career, I took a few low/no pays, knowing that I could use the stories again as reprints, or in my own short story collection. At that point, the publication credit itself was more important to me than the money.

Now, I’m a member of the Writer’s Union of Canada and always ask for professional rates, unless there is some amazing reason why I should lower or waive my fees (like the book being a charity work, or because it’s some market or will attract some attention that I might not be able to access otherwise, or if my story will be beside a Big Name Author who will boost sales of the book and thus awareness of my existence).

Again, it’s up to you to decide whether that amount, in that publication, in this time of your career, is worth it to you.

Short stories may also be re-printed in other anthologies or magazines. If you’re asked to contribute a new story to a publication but don’t have one (or have time to write a new one), sometimes the publication will take a story that’s already been published once, and is outside of the exclusivity period. The amount of money offered for a reprint will often be less than that offered for a new story (say, $200 where a new story is worth $400).

Per Page

This form of compensation is more usual to comics than short stories and novels, especially if you’re also the artist. Generally if you’re contributing a comic script to an anthology, they’ll pay you per scripted page. I’ve gotten around $11 per page, or $150 CAD total for a 14 page script.

But rates will vary depending on who you’re writing for, and why. Check with your local creators and guilds for appropriate rates in this medium.

Per Draft

There’s really only two times you’ll be paid per draft, and that will be if you’re writing for television and film, or when you’re ghostwriting (that is, writing a novel for someone else who will put either their own name or a pseudonym on the cover, like many celebrity autobiographies or series like The Babysitter’s Club).

You’ll generally get a bundle deal for an Outline, First Draft, and Second Draft / Polish. If further drafts are required beyond that, you or your agent will be able to negotiate for a supplemental payment, appropriate to what your original payment was.

Money for this sort of work is generally split into two or three payments – one on delivery of the outline or on the signing of the deal, one on delivery of the outline or the delivery of the first draft, and one (if there are three) on publication or when the script is greenlit (that is, when the production team begins work on shooting the script.)

The fee that you can command for this work depends on how popular a writer you are, how many novels or scripts you’ve written before and how well they did, how quickly it’s needed, and how much research will go into it.

Your local screenwriter’s guild with have payment breakdowns in their member handbooks, which professional producers are beholden to adhere to if you’re a member. These rates are based on the length of the script, the number of drafts that will be expected of you, if you need to spend time in the Writer’s Room, the format of the show (Multi-cam One Hour, Children’s Animation, Feature Film, Digital Marketing, Video Game, etc.)

Even if you’re not a member of these guilds, familiarize yourself with their suggested rates. While you may not be able to command those rates at the start of your career, know your worth and work your way steadily towards the market fees.

For example, in 2010 Independent Production Agreement for the Writer’s Guild of Canada (they cover anyone who writes scripts), to deliver a Feature Film with a budget of over $60,000 CAD, a WGC member in good standing must be paid at minimum $50, 185 for the full script, broken down to an original treatment (the film version of a pitch document) and two drafts. This fee amount lowers if the treatment is provided by the producer, or is an adaptation of pre-existing source material (like your novel).

As I’m a member of the Canadian Writer’s Union (they cover anyone who writes anything that isn’t scripts), my union suggests a starting payment of $40,000 CAD for ghostwriting a book. That might seem like a lot of money, but don’t forget that as a ghostwriter your name isn’t going to be on the book. You don’t get the press, you don’t get the marketing push, and you likely won’t get any of the royalties from the sale of the book, unless that’s explicitly written into your contract. If it is, it will absolutely be a lesser percentage than if you were listed as the author.

And don’t forget that there’s more to writing than just writing when you’re creating a book for someone else. I was once asked to ghostwrite a true crime/courtroom thriller memoir for an American lawyer – besides the hundreds of hours of work it would take to write the book itself, I explained that I would also need to charge for the time it would take for me to read all of the courtroom notes, interview the lawyer, and teach myself American Environmental Law, and learn the American justice system.

The offer was withdrawn when I pointed out that it made no sense to hire a SF/F writer to write courtroom drama, and suggested they reach out to someone who actually writes in the genre they need already, and who is familiar with the system.

(Though I wasn’t going to take it anyway – they offered me a measly $5,000 USD, which is significantly below the hourly minimum wage if I was to break that down into outline, first draft, and polish.  And someone else would get the credit as the writer? No, thanks.)

Royalties

Ah, and now we come to the heart of it!

Remember how I said that you’re not really selling your book so much as ‘leasing’ it, and that a publisher pays you for that privilege? That’s what a ‘royalty’ is.

The publisher pays out of pocket to have your manuscript substantively edited (with your editor at the house, whose salary they pay), and then copyedited and/or proofread (again, usually someone salaried in house), and then a typesetter/graphic designer who makes the manuscript book-shaped, and then pays for the art/stock images and fees for a cover artist and designer, pays for the review copies out of pocket, pays for the books to be printed and shipped, and of course all the marketing and the salaries of those people who run said marketing.

You, author, don’t need to pay a cent of that.

As such, the publisher keeps the lion’s share of the profit they make from selling your book, in order to recoup the cost of doing all that. As such, you’ll likely be given 15% of the profit, though I’ve had royalty rates as low as 10% and as high as 35% before, though. eBook royalty rates tend to be higher, (around 20%-45%). The royalty rate for audiobooks depends on if your publisher produces it, or if you go out of house to somewhere like ACX/Audible, and what sort of payment arrangement you or your agent makes with the narrator and audio editors. This royalty is usually between 10%-50% per sale of an audiobook.

Royalty cheques are sent to your agent either yearly, half-yearly, or quarterly. (I get all of mine via PayPal as all of my publishers are American and a lot of Canadian banks won’t take an American cheque. Also, the rates are better that way.) Your agent will review your Royalty Report (the breakdown of how many copies of which books sold, in which formats), make sure there are no mistakes, and then forward on your payment to you.

On average, you’ll be making $3 for every $20 paperback that is sold, and roughly $2-10 for every ebook and audiobook, depending on how the percentages break out.

Advances

The big money!

Or so folks think.

Here’s the thing – an Advance is not a gift from the publisher. It is an advance on your royalties. Like a payday loan, the publisher is giving you the money they think you’ll earn in royalties in advance of your actual sales and royalty cheque. You don’t get an advance and royalties right away.

If a manuscript is very in demand (especially if it went through an auction where several publishing houses bid on the right to be the ones to publish it), and/or the publisher thinks they can make a significant amount on the book, they’ll give you the advance on your royalties on the understanding that you’ll be able to use the money to focus on finishing the book and working with the publisher to do the best job possible for everyone.

Obviously they’re not saying that they expect you to quit your dayjob, but you know, a good chunk of money would mean a lot of peace of mind for a lot of writers (paying off debts, paying off a mortgage, etc.), which will free them up to focus more on the book.

However, you’re not actually going to see that money all at once.

Advances are delivered to you in thirds, generally – one third on signing, one third on delivery of the novel, and one third on publication. Let’s say you get an advance for $100,000. That’s $33,000 for each stage. And depending on how long it takes you to write/edit/rewrite the novel to the editor’s satisfaction, and how long it takes the publishing house to turn that manuscript into a book, then you might only be getting one of those payments per year.

And remember, that money is an advance. Until you earn out that advance, you won’t be seeing another nickel from the publisher. It may take months. It may take years. I have authorfriends who have never earned out an advance, not one.

If you don’t earn our your advance, that may affect the publisher’s decision to ask of another book from you, or continuing a series; they don’t want you to be a moneypit and you don’t want to look like a losing proposition. So as much as we all want the mega-bucks advance, sometimes it’s actually better to get a smaller one, or none at all.

Speaking Engagements

There are other streams of income available to authors beyond just writing and selling your books. Believe it or not, people will pay you to hear you talk. Weird, huh?

Your Speaking Fee will be based on your popularity, if you have to travel to get there, and where you are in your career. For example, I hear that Neil Gaiman commands a fee somewhere around $5,000 USD for an hour appearance – it seems like a lot, but he’s an extremely busy guy with two TV shows to run and a 4-year old at home, so a fee that high weeds out the not-serious requests. (Besides, I also hear that he usually donates a percentage of that back to the location’s local library).

Your local guilds and unions will know what a good amount to request is, and may also offer discounts and grants to schools, charities, and community groups to be able to afford authors. That way you get paid your full amount and they don’t have to cough up all of it.

I charge about $100/hour, and travel if it’s far. That sounds like a lot, but I once took a two hour bus ride up to a museum to give an hour and a half workshop, then another two hour bus ride home. All told I made about $180, and $30 of that was to cover the bus tickets.

If your books are appropriate for children, lots of schools provide opportunities to come in and talk to their students for a fee. You can also teach workshops and seminars at community centres, charities, libraries, colleges, and universities. I’ve been asked to consider teaching an eight-week course on worldbuilding at a local comic book/animation school, and will be able to keep all the fees I collect from the students outside of paying rent on the space.

And if you’re a SF/F/Horror or romance author, conventions may invite you to do panels and signings. If you’re a Guest of Honor, that means they’ll usually cover your travel, hotel room, and give you a daily honorarium (usually between $25-$100) to cover meals. If you’re just a guest or panelist, they’ll likely comp your badge fee and/or vendor table (if you want one; I generally donate mine to the local indie book store to come in and sell more than just my own books), and you’ll have to pay for the rest yourself.

Literary festivals will often provide an honorarium in the realm of $100-$400. Your appearance there will be just one day, usually, and they’ll ask you to read and do a Q&A panel, and will generally have someone there to sell your books for you.

A residence is basically when an author is given somewhere to live – usually of historic or literary value, like a Heritage Trust house, or at a college/university – for a few months, along with an honorarium to cover other daily expenses. In return, you promise to mentor a group or writers, do some free appearances/workshops/lectures at the local library/community centres, and of course write your manuscript (ideally directly inspired by where you’re living).

Authors can also apply for support from your local arts council in the form of grants. Like a bursary for higher education, this money is basically a conditional gift (you get the money on the understanding that when the book is done, you thank the council and/or put their logo in the book, and give back to the community as much as possible the form of free appearances, etc.) These can be anywhere from $100 to $100, 000.

Do some research into what’s available through your local guild/union, library associations, author associations, and arts councils. And of course, keep in mind that the earlier in your career or the more unknown you are, the lower a fee you’ll be able to command. That’s okay, you can work your way up. And there are way more contests, awards, grants, and purses for early-career writers than mid-career or established ones.

Foreign Translations

Like getting reprint fees for short stories that have already been published once, getting paid for someone else to take a book you’ve already written and do all the work to translate it into another language, and sell it in their country, is pretty sweet.

This will be just like signing with a publisher all over again – you may or may not get an advance, but you will definitely get royalties, and sometimes you get a little “thank you” money as a gift.

The difference here is that the foreign publisher may have to pay some of their profits to the original publisher, as the original publisher is the one who put in all the money and work editing your manuscript and creating the cover. (This is why you sometimes see foreign editions with different covers – they chose to make their own rather than use the pre-existing one.)

And that’s only if the publisher doesn’t also own the foreign publishing house, like some of the Big Five do.

Signing the rights to allow foreign translations to be printed isn’t a violation of your original contract with your first publisher, because (unless, as I said, the foreign house is an imprint of your larger publisher as a whole), your first publisher is only taking worldwide rights for the language that the book is originally written in.

Generally speaking, these publishers people approach you or your agent, not the other way around. Your agency will likely have someone on staff whose job it is to court these kinds of deals, and any agency worth their salt will be at international book fairs with a catalogue of their client’s available titles.

Dramatic Adaptations

I’ll go into this topic in more detail in a future post, but it may happen that someone approaches you/your agent to make a dramatic adaptation of your book – a film, a TV series, an audiodrama, a podcast, etc. This is basically when anyone who isn’t you uses your IP as the basis to create something else.

Generally speaking, these people approach you or your agent, and your agency will likely have someone on staff whose job it is to court these kinds of deals.

The payment range for something like this will depend on how popular you are, how popular your work is, how many people are vying for it, what kind of production they want to make, and how big the production house is. Disney, obviously, is going to pay you more than Big Cheese Studios down the block. And they’re going to pay more for a New York Times Best Seller than for an indie that’s only sold a few hundred copies. Major feature film franchises take more money to make and earn more money than an indie podcast, so amount of money offered is dependent on that, too.

When an agreement is made – that is, you’re happy to lease your IP to these people to make the production, which doesn’t violate your deal with your publisher because they’re making a different product, i.e. not a “book” – your publisher may get a cut of it, depending on what kind of a contract you signed with them.

These deals are called “Options”. The producer/production house that wants to make your IP into a dramatic thing will pay you for the right to do so. Like an advance, the payments are usually split up – you get some when you sign the deal, some when the production is greenlit, and some when it’s released. This could be as low as $1,000 or millions of dollars based on a variety of reasons.

Because it costs so much to make films and TV, and takes so much time to pull a project of this scale together, it usually takes years. For every year that they the production house holds on to the exclusive rights to make your IP, but doesn’t actually make it, you’ll likely get another chunk of money.  I’ve heard of payments being as low as $1,000 and as high as being in the millions. And of course, many of the most popular IPs have limit dates on them – like they can only be renewed ten times before either the production has to happen, or the house has to give up the option and let someone else try to make it.

You may also be asked to sign a Shopping Agreement, which basically means the producer/director/ screenwriter has no executive director/studio/money/distribution yet, and pays you a token amount (like, $1), to validate your contract stating that you promise not to snatch the rights out from under them until they have the rest of their ducks in a row and can assemble a full production team and announce that their production house is making the project. At that point, you’d sign an Optioning Agreement.

It would be up to you and your agent to negotiate if you get a cut of the box office profits, or DVD/BluRay/Streaming sales, if you get any of the money from the merchandising like character totebags or plushies, or indeed if you get any backend money at all.

Merchandising

If the publisher wants to make any swag or stuff that they’ll be selling (not giving away for free) based specifically on your IP, you’ll need to negotiate for a cut of that, too.

Like a royalty, this will likely operate on a percentage basis based on your own klout and the popularity of your books.

Selfpublishing

It’s true that when you selfpublish a book, you get to keep 100% of what you earn. But it’s also true that you also have to pay 100% of the cost to create that book.

And the market is so saturated with half-thought-out, poor-quality, self-important selfpublished fiction that if you want your book to stand out and make you money, you have to not only do it well, you also have to do it professionally.

Paying for editors? That’s from your pocket. So is buying stock images or commissioning art for a cover, and paying for someone to design the cover. And the interiors, if you want it professionally typeset. And while it’s free to list a title on Amazon/Kindle CreateSpace, most other printing services like require a listing fee.  You’ll get copies of your books to sell at a discounted rate as the printer, but you still have to buy them, and pay for them to be shipped from the printer’s to you.

Bookstores will generally only take selfpublished books on consignment, which means they get a bigger bite of the cover price.

You’ll have to pay for marketing – ad design and placements on websites and in print, fees to get a table at trade shows and conventions, paying to send copies of the book to review outlets or awards for consideration, and sometimes paying to get your book listed or reviewed on big name websites.

Literally everything costs money to do, and you may not see a return on it if your book doesn’t take off. So be prepared to have to build and stick to a budget if you elect to selfpublish.

On the upside – all the profit is yours to keep or reinvest in your marketing.

What will you need to pay for?

Your publishing house will have a specific per-book marketing budget for your work. It might be as low as $200 bucks per title if you’re a debut author at an indie publisher, or it might might be hundreds of thousands if you got a mega-deal with one of the Big 5.

Publishers will generally pay for advertisements in print/online, to send review copies to specific outlets (like the Library Journal, Publishers Weekly, Quill & Quire, etc.), to buy a blog tour, to submit the book to awards, maybe to buy ads on transit, and to send ARCs to book bloggers and influencers. If the publisher has lots of budget, you might get a book tour, or they might pay for part of your book launch, and they’ll likely pay extra fees to bookstores to get your book placed on shelf endcaps, shelved face-out, or piled on spotlight tables.

Things like postcards, bookmarks, pins, posters, and anything else you may want to give away for free as swag will likely be on you – you may even have to design it yourself if the publisher can’t lend you their designer. You’ll likely have to pay for your own book launch, including venue fees, licencing, snacks and booze, and if you don’t have a bookstore coming to do the selling for you, actually buying a box of books from your publisher to resell. Publishers will not fund your book tour if they don’t offer it for you, or fund a book trailer, or basically anything else that doesn’t directly result in sales of the actual book for them.

Agency Fees

I’ve addressed this in earlier articles, but if you have an agent, they’re entitled to 15% of all the money they make for you. And to be clear, that’s only on what they actively bring in for you and actively negotiate or notarize – if your agent doesn’t help you sell a short story, you get to keep all of that money you just made.

That 15% (or whatever percentage you negotiated with them) comes out of your 15% (or whatever percentage of royalties your agent negotiated with the publisher). So that $3 per $20 book is actually $2.55 by the time it makes it to your pocket. That $100, 000 advance? They get $15, 000 of it.

On the other hand, 15% of $0 is $0, so it’s in your agent’s best interest to make sure you make money, and lots of it, in all the ways they can.

Taxes

Don’t forget that being a writer is akin to owning a small business. You will be taxed on your income. Agencies will send you a document which will detail your annual income through royalties. One-time payments like for short stories don’t come with tax documents, though I always declare that income as well, as publishers will be declaring it on their end.

In Canada, if you make more than $30k annually on writing, you will need to get an HST number and create a formal business in the eyes of the government. I assume there’s a similar requirement for other countries – research your local laws.

I also am paid via my agency, and via Amazon in USD rather than CAD, so I need to declare my American income as such in my tax documents.

All grants will likely be taxed (I won a $10k grant and had to give the government $2k of it), and advances will definitely be taxed, so make sure you keep enough back in a high interest savings account to cover what you anticipate you’re going to to have to pay come tax season.

On the upside, you can claim a lot more than you probably think for your expenses. I claim new office equipment (computers, printers, furniture), software (FinalDraft, Scivener, Microsoft Office, GoogleDrive Storage), utilities (about 10% of my hydro, internet, and phone bills as I write from a home office), office supplies (paper, ink cartridges), mailing and shipping (sending out books for review, mailing bookmarks to schools), transportation to events (transit and cab receipts), meals (with my agent, with authorfriends, with editors), charitable donations (donating books to raffles, attending mentorship events), etc.

Take a look at what’s claimable in your country.

Bottom Line

There’s lots of ways to make money – and lots of ways to spend it – in this career. Make sure you seek out financial advice if you need it (that’s on you, it’s not your agent or publisher’s job), and look into tax accountants who specialize in arts workers if you find the task of doing your own taxes challenging.

I keep an excel spreadsheet of each dollar coming in and going out, and have a small file folder prepared to file my receipts in so they’re always sorted by date and by which line on the tax form they align to.

Figure out a system that works for you and makes tax time easy, and you won’t regret it.

Happy writing, and I wish you a lucrative career!

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Still have questions? Read more WORDS FOR WRITERS posts here or ASK ME HERE.

JM FreyWORDS FOR WRITERS: How do writers get paid?