Making Money Moves: Five Things Every Writer Should Know About Book Advances and Royalties

Welcome to Five On Fridays, my weekly straight-no-chaser newsletter where I help demystify the publishing industry for new writers and early-career authors. Let’s jump right in.

Few writers have escaped it: the questions from family and friends wondering when you’re going to get paid for that book deal they heard so much about. We can thank Hollywood, and ironically books, for perpetuating the myth that every writer worth their weight gets a six-figure book deal that changes their lives forever, and that the check with all those zeroes magically arrives in our bank accounts (or mailboxes, depending on the movie), whole and intact just days after a deal announcement. (I touched briefly on the subject in a previous post, The Truth About Six-Figure Book Deals.) 

Sadly, that is not how any of this works.

Here’s how it really works.

Advances are paid in installments

Advances are up-front, “advance” payments against future book sales. Let’s use $100K to demonstrate installments since that’s the threshold for a six-figure deal. Assuming a 15% agent commission, estimated taxes of 30%, and the advance being paid in three equal installments—signing, acceptance of the final manuscript, and publication—here’s the author’s net first payment: $19,833 on a one-book deal. This payment can arrive anywhere from a month to over six months after signing the contract. At the end of all three installments, the author is looking at a net of around $59K. Don’t get me wrong, $59K is a nice chunk of change, but the number offers a reality check (no pun intended … okay, maybe a little pun intended) on how much of a six-figure deal actually ends up in an author’s pocket. 

Everyone makes a fuss about advances, but royalties are where it’s really at

While much of the money talk in book deals surrounds advances, the real money, the real benefit for authors is in royalties. Royalties are payments made based on how many books an author sells and keeps selling. Royalties kick in only after an author earns out their advance, and they’re calculated based on how much the publisher actually earns from each book sale. 

But royalty payments hit slower than a molasses in January and only after you’ve earned out

Something a lot of writers don’t know is that royalties are often paid out only twice per year, and payment is delayed to allow for returns and processing. Let’s say your royalty rate is 10% of the list price, and your book sells for $20: You’ll earn $2 per book sold. If your book sells 10,000 copies, you would earn $20,000 in royalties. But you’ll only start receiving money after your advance has earned out. In other words, if your advance was $20,000, the next $1 you earn above that (combined with a whole lot of other dollars, hopefully) will be sent to you in your next royalty statement. 

Some industry professionals point out that smaller advances can be a good thing because they offer the opportunity to earn out quickly. While others surmise that smaller advances mean less attention from a publisher, thereby making it harder to earn out. Discussions about the pros and cons of high/low advances are the types of conversations authors should feel comfortable having with their agents.  

The majority of books never “earn out”

It's estimated that 70% of books don't earn back their advances, meaning 70% of authors never receive royalties on those books. The good news is that even if you don’t earn out, you typically don’t owe the publisher the difference between what they advanced you and how much your book earned in sales. The downside, however, is that a publisher might be reluctant to publish a second book from an author who didn’t earn out. 

Making money moves

While your average author will likely never earn the kind of money articles and movies are written about, some well-known authors have earned notable advances. In 2009, James Patterson received a $150 million advance from Hachette to write 17 books. Both Bill Clinton’s 2019 memoir and Britney Spears’s 2021 memoir received $15 advances. Former Fox host Megyn Kelly received $10 million for her memoir. And the Obamas secured a joint deal worth at least $65 million for their memoirs. Michelle Obama’s Becoming went on to sell over 17 million copies worldwide. In the world of high-dollar book deals, it pays to be a celebrity or a politician. 

**A bonus note from me that has nothing to do with advances and royalties

I have a bit of happy writer news to share. Yesterday, the Mystery Writers of America, the country’s leading organization for crime and mystery writers and home of the Edgar Awards, announced that I was one of two recipients of the 2025 Barbara Neely Scholarship Grant. The grant is named in honor of the late mystery writer Barbara Neely, author of one of the first crime fiction series to feature a Black woman protagonist. If you enjoy crime fiction with a serving of wit and social commentary, you’ll enjoy Neely’s Blanche White Mystery series. You can learn more about Ms. Neely and her trailblazing Blanche White series here. And you can read more about the Mystery Writers of America Barbara Neely Scholarship here.

That wraps up this week’s Five On Fridays. Thank you for subscribing and reading. If you found this newsletter helpful, please share it on social media and forward it to your writer friends. Happy writing!

-Grace