A standard contract for an author will usually include provision for payment in the form of an advance and royalties. An advance is a lump sum paid in advance of publication. An advance must be earned out before royalties are payable. An advance may be paid in two lump sums: the first payment on contract signing, and the second on delivery of the completed manuscript or on publication.
An author's contract may specify, for example, that they will earn 10% of the retail price of each book sold. Some contracts specify a scale of royalties payable (for example, where royalties start at 10% for the first 10,000 sales, but then increase to a higher percentage rate at higher sale thresholds).
An author's book must earn out their advance before any further royalties are paid. For example, if an author is paid a modest advance of $2000.00, and their royalty rate is 10% of a book priced at $20.00 - that is, $2.00 per book - the book will need to sell 1000 copies before any further payment will be made. Publishers typically withhold payment of a percentage of royalties earned against returns.
In some countries, authors also earn income from a government scheme such as the ELR (Educational Lending Right) and PLR (Public Lending Right) schemes in Australia. Under these schemes, authors are paid a fee for the number of copies of their books in educational and/or public libraries.
These days, many authors supplement their income from book sales with public speaking engagements, school visits, residencies, grants, and teaching positions.
Ghostwriters, technical writers, and textbooks writers are typically paid in a different way: usually a set fee or a per word rate rather than on a percentage of sales.
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Compensation can refer to:
- Financial compensation (disambiguation),
- Compensation (chess), various advantages a player has in exchange for a disadvantage
- Compensation (engineering)
- Compensation (essay), by Ralph Waldo Emerson
- Compensation (film), a 2000 film
- Compensation (psychology)
- Biological compensation, the characteristic pattern of bending of the plant or mushroom stem after turning from the normal vertical position
Famous quotes containing the word compensation:
“... the compensation for a death sentence is knowledge of the exact hour when one is to die. A great luxury, but one that is well earned.”
—Vladimir Nabokov (18991977)
“Senators and presidents have climbed so high with pain enough, not because they think the place specially agreeable, but as an apology for real worth, and to vindicate their manhood in our eyes. This conspicuous chair is their compensation to themselves for being of a poor, cold, hard nature.”
—Ralph Waldo Emerson (18031882)
“The only compensation which war offers for its manifold mischiefs, is in the great personal qualities to which it gives scope and occasion.”
—Ralph Waldo Emerson (18031882)