Getting paid, or, don’t quit your day job

I promised some friends that I wouldn’t blog about the business of writing for a while and I haven’t in ages so, um, you two? Avert your eyes.

Recently some dear friends of mine sold books for the very first time. A small round of applause for their hard work and good fortune! Yay, them!

And as you do (and as I did) they’ve started planning how to spend their advance money (such that it is). They were suffering from the missaprehension that they would be seeing the money sometime soon. I disabused them.

Now I would like to disabuse you.

Before I begin two things:

    1. I’m only talking about publishing payment practices in the US of A and I’m only talking about mine and my friends’ experiences of them. I have never worked in publishing. I’d be grateful and interested to hear about varying experiences both here and in the rest of the world. And I’d love to hear from those who pay as well as those who receive.

    2. I suspect some of you are hazy on what exactly an advance is. (I was.) An advance is a sum of money that is paid (or advanced) to a writer by a publisher against the future earnings of a book. So when a writer is made an offer of money for their book that offer is an advance.

    I sold my first book (not a novel) to Wesleyan University Press for US$1,000. I got to keep that money no matter what happened, but I didn’t get any more dosh from Wesleyan until the royalties (a percentage of each book sold, can vary from 5% to 12% depending on format) on the book exceeded the $1,000 needed to pay Wesleyan back.

Here’s what happens when you sell a book:

A choir of angels sing and fairy dust descends from the air

Once you have accepted an offer on your book the nitty gritty of the contract must be negotiated. This is tricky to do and involves things like “escalation clauses” and “sub-rights” and is why it’s a stupendously excellent idea to have an agent do it for you. Believe me they earn their 15%.

How long that process takes depends on whether your agent already has a specific pre-negotiated contract with the publishing house or not. When I negotiated my contract with Penguin USA for the Magic or Madness books it didn’t take very long because I had no idea what I was doing and said yes to pretty much everything. Ah, the perils of negotiating a contract agent-less.

Once that’s done the contract has to be drawn up. How long that takes depends on the publishing house. Once it’s done your agent checks it. Believe it or not, sometimes there are things in the contract that shouldn’t be there, items that have specifically been negotiated out. This is another reason it’s such a great idea to have an agent.

One of the items specified in the contract is not just how much you will be paid, but how you will be paid. Typically (but definitely not always) your advance is split into thirds. The first third you get upon signing the contract, the second upon delivery and acceptance of your manuscript, and the third upon publication.

If you have a three-book deal of say $15,000 a book1 your total advance is $45,000. Thus you get $15,000 up front as the third on signing because you are signing for all three books. Then you get another $5,000 when the first book is delivered and accepted because that is a third of the $15,000 advance for that book. Then another $5,000 on the publication of the first book. And so on for the second and third book. Your $45,000 winds up being spread over at least three years, but sometimes more than four or five. This depends on how long before your first book is published.

Back to the contract:

Once your agent approves it, you sign it, and the contract is returned to the publishing house where the department that handles payments issues a cheque. I have seen the gap between signing the contract and receiving the cheque be anywhere between two weeks and a year. Any of you had a quicker turnaround? Slower?

The gap between accepting the offer and the contract being offered can also be many weeks. So it’s not only possible but usual for it to take at least six weeks between the intial offer and your cheque showing up. And, frankly, six weeks is fast.

And remember that’s just the first third. The other two thirds will come to you in third of a third parcels over the next few years. It means that your writing earnings could well look like this (minus your agent’s 15% which I haven’t taken out on account of my mathematical ability is not up to it):

2007: $20,000 (payment on signing, delivery & acceptance of 1st book)
2008: $10,000 (publication of 1st, delivery & acceptance of 2nd)
2009: $10,000 (publication of 2nd, delivery & acceptance of 3rd)
2010: $5,000 (publication of 3nd)

It will especially look like this if, like me, you didn’t know enough to make sure that your three-book deal wasn’t joint accounted. I sold my trilogy in 2003 and although the first two books have already earned out their advances I have not seen any royalties. Nor will I until the third book earns out as well. That’s what joint accounted means: The accounting for all three books is tied together.

It’s also increasingly unusual for a book to come out that quickly. I have several friends who sold books last year that aren’t scheduled for publication until 2009 (or in one case 2010). In which case their spread could look like this:

2006: $20,000 (payment on signing, delivery & acceptance of 1st book)
2007: $5,000 (delivery & acceptance of 2nd)
2008: $5,000 (delivery & acceptance of 3rd)
2009: $5,000 (publication of 1st)
2010: $5,000 (publication of 2nd)
2011: $5,000 (publication of 3rd)

Obviously living on $5,000 a year is tricky. Most full-time writers I know are getting bigger advances than that, or writing more than one book a year, or doing other kinds of writing, or all of the above. Scalzi did a recent breakdown of his fiction writing earnings over the past few years.

The more salient point: Most writers I know have a day job.

Each one of those payments comes less quickly than you think it will. I naively thought that my payment on delivery & acceptance of my first book would come automatically as soon as my editor had accepted the manuscript. It did not come until I asked for it. Or rather several weeks after asking.

This is not unique to publishing. It is, in fact, the lot of the freelancer: No matter who you work for, no matter what the industry, the gap between doing the work and getting paid is a LOT longer than we freelancers would like.

Hope this has been helpful.

Do please fill the comments thread with criticisms, questions and accounts of how it works in other places. I’m all ears. (Or, you know, eyes. Whatever!)

  1. That’s an above average advance for most genres I know about. I chose it because it’s easier to do the maths with an advance of $15,000. []

17 comments

  1. Chris S. on #

    Huzzah! Thanks for posting that information The more writers know, the better.

  2. Kelly McCullough on #

    This sounds about right to me with the acknowledgement that 15k is high for an early career advance. And let me firmly second that agents earn that 15%.

  3. marrije on #

    although the first two books have already earned out their advances

    Good news! Not so much about the joint accounting, but good news nonetheless!

    And I hereby solemnly promise not to quit the day job. Oy. I’m not so good with unreliable money streams – the kind I get in my business is uncertain enough, and we usually get paid in full one month after finishing the project.

  4. Dawn on #

    Very informative! Its nice to know things like this before you get into the publishing world. That is, IF I ever actually do so. hm. :)

  5. Tim Pratt on #

    My advance for my recent two-book deal has kind of a wacky structure. My agent wanted me to get a big chunk of money up-front — which she managed, though with some trade-offs. So I got half the total advance on signing (that was a lovely day), and then I get one-quarter of the remainder on delivery and acceptance of book 1 (which was just accepted yesterday, hurray!), 1/4 on delivery and acceptance of book 2, 1/4 on publication of book 1, and the final payment on publication of book 2. Which isn’t so bad, since book 1 is coming out in October, and book 2 may come out as soon as six months after that, so I won’t have to wait *too* terribly long. It is an amusingly byzantine pay structure, though.

  6. Kevin Wignall on #

    Very accurate, particularly about the need to get an agent FIRST! In the UK, advances are often split into four (with separate payments for hardback and paperback publication). Also, in the US, “acceptance of manuscript” is increasingly being pushed back to the point at which it goes off to the printers – agents are having to fight for earlier payment. (on the plus side, my US contracts are split into two payments – signature and acceptance)

    Finally, if your genre is crime/thriller or in the general “chick-lit” area, your first advance could be much much bigger, but this brings with it different perils… I’ll save that story for another time.

    excellent and well deserved that you earned out, Justine.

  7. Rebecca on #

    it’s scary. especially since i have no idea what sort of job i’ll get when i graduate. and also because the likelihood of getting a book deal in the next ten years is pretty slim. i could always go to grad school and put it off a bit longer, but i’m kinda schooled out at the moment. hmm….got any suggestions for day jobs? what were yours?

  8. Diana on #

    My first book deal was decently above average, and I still did not quit my day job for more than a year afterward. Benefits and lack of self employment tax are, like agents, worth their weight in gold. I finally quit about a year ago, and when I received my last check for my last book in my contract, I felt the burn.

    I got my offer in April, and received my signing check in July. I was thrilled with the speed!

    The other thing to keep in mind is that the money you receive is not your “income.” It’s your novelist businesses gross take, and from that, you need to pay for all of your supplies, your website, your publicity, etc. not to mention those benefits and self employment taxes.

  9. Rebecca on #

    there’s self-employment taxes? shoot me now. maybe i will go to grad school.

  10. Penni on #

    With my most recent deal I requested a small amount on signing and the bulk on delivery (to encourage me to actually write the book). Most publishers will give you some leeway with how the advance is paid.

    Luckily I never had a day job. I am just mostly poor.

  11. Penni on #

    Oh the other thing for me to get used to was being paid royalties every 6 months. Also royalty statements in negative quantities when you are still paying off your advance (they don’t mean you have to give them any money, it just means you sulk for a few days until you come to terms with the fact that that is totally-otally normal.)

  12. Diana on #

    “self employment taxes” in the u.s. is a fancy way of saying that you need to pay both halves of social security/medicare. It’s an extra 15.3%.

  13. Lauren on #

    So basically what I’m hearing is: return the tiara and the yacht then have husband un-retire? I don’t like it one bit.

    Thankfully, I’ve been freelancing as a photo producer for several years so I’m used to painfully long pay periods (and the need to hunt down reluctant payors with threats and assorted means of intimidation). This is why god invented credit cards, no?

  14. Justine on #

    Thanks for the earning out congrats. I’m holding off celebrating until all three have earned out. You’ll definitely hear about that glorious day right here.

    Tim: Yeah, I’ve heard of some folks getting their deals structured that way. Congrats! I’d love to know how, say, Stephen King’s deals are structured. I’ve also heard that he gets like 20% royalties. Can you imagine?

    Diana: Very good points. American writers really need to keep health insurance in mind. It’s a lot easier if you come from those countries with nationalised health like Australia. On the other hand, Australian writers earn heaps less than USian ones unless they’re selling overseas as well as at home.

    Lauren: The good news is that you get your agent to do the hunting down of the creditors. All you have to do is put your feet up and wait. Oh yeah and, you know, write and stuff.

    God invented credit cards?

  15. Sophie on #

    hmm, so now I just have to GET a (full-time) day job, and then I can refuse to quit it. maybe it’s time for that library science degree…

  16. SarahP on #

    My publisher’s paying out half on signing and half on delivery of each manuscript. Which I was told meant they were being very nice to me. Justine, your comments about payment in thirds makes me see why.

    Thanks for breaking this down so clearly!

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