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Wednesday, September 17, 2014

Advance Realities

When I went traditional the questions from my friends started pouring in. Aspiring authors everywhere want to know all about advances, how much they typically are, how they are paid out, all the fun details. The answer isn't a simple one, but I'll try to break it down.

The amount of your advance depends all on the commercial appeal of the novel (movie, cable deal, etc.). Payout is generally (but not always) half upon the deal and half upon turning in the completed work. For a smaller deal ($10 and under) consider this:

$5,000 on signing, but that's not net, that's gross. 
$750 to your agent (based on typical 15% domestic sales).
$1572 to put away for taxes (37% to be on the safe side).
Leaves you:
$2678. 

And, if you are getting an advance of $10k or less, it isn't likely you'll receive much marketing so you need to be prepared to do some serious marketing on your own. So, you may need a bit of that money for it. You definitely won't be getting enough initially to quit your day job.

Now, if you're one of the lucky few who get a six digit advance, lets say a major deal of 500K for a trilogy (remember this is very rare and most often happens to those who are already NYT bestsellers), here's what it could look like. At 1/2 of each on signing for (remember it could just be a 3rd depending on the contract):

$249,999 gross on signing.
$37,499 to your agent.
$78,625 to put away for taxes.
Leaves you:
$133,875.

The remainder of your advance will be paid out over the course of likely three years as each of your titles is accepted by your publisher. So, at the acceptance of book one you'll receive another $83,333. The following year at the acceptance of book 2, you'll get another $83,333. And the third year at the acceptance of book 3 you'll get the remaining $83,333. But don't forget the agent percentage and taxes will come out of each one of those.

So what is the average advance? That all depends on the publisher and how they feel your novel is going to do in the market. It can be as few as four digits with a small press, or as many as seven with one of the Big 5. For more info, check out the following links:

Agent Mandy Hubbard (Advance Breakdown)
Author Brenda Hiatt (Typical Advances)

3 comments:

  1. Heather, I love those big numbers. And.. remember... there are many write offs you can take. As long as one book is finished, you can accrue expenses... traveling to conferences, conferences themselves, office space, etc. Great to save the taxes...but find a good accountant and you will get most of that back.

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    Replies
    1. So true! Hmm, sounds like I need a post on that too!

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  2. Very informative. I always wondered about this topic.

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