How Do US Book Royalties Work? A Plain-English Guide for Authors
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Last updated: October 18, 2026
Book royalties explained for authors: a royalty is the share of each sale paid to you, calculated as a percentage of either the list price or the publisher's net receipts. In traditional publishing, rates are set by contract and are often lower per copy because the publisher pays all costs and an advance. In self-publishing, platforms pay a much larger share, but you cover production yourself. The exact numbers vary, so always read the specific contract or platform terms.
This article is general information, not legal or financial advice. Have any contract reviewed by a qualified professional.
Key takeaways
- A royalty rate is a percentage. What it is a percentage of matters just as much as the number.
- List price royalties are based on the cover price. Net receipts royalties are based on what the publisher actually receives, which is usually much less.
- Traditional advances are paid against royalties. You earn more only after the advance earns out.
- Self-publishing royalties on platforms like Amazon KDP are higher per copy but depend on price and printing costs.
What is a royalty rate?
A royalty rate is the percentage of each sale that the author earns. In a traditional contract, it usually differs by format and may increase after certain sales thresholds. Literary agent Rachelle Gardner offers hypothetical examples: 10% of the cover price for the first 5,000 hardcovers, rising to 12.5% and then 15%, 6.5% to 7.5% for trade paperbacks, and 25% for ebooks, while stressing that all numbers vary across the industry (Gardner, 2010).
Are royalties calculated on list price or net receipts?
This is one of the most important details in any contract.
- List price (or retail price) royalties are based on the price printed on the book. If a hardcover lists at $28 and your royalty is 10%, you earn $2.80 per copy.
- Net receipts royalties are based on what the publisher receives from retailers after discounts. If the retailer buys that $28 book at a 50% discount, the publisher receives $14. A 25% net royalty would pay $3.50, while a 10% net royalty would pay only $1.40.
Ebook royalties in traditional contracts are commonly calculated on net receipts. Read the definitions section of any contract carefully, and do the math with realistic discounts.
How does an advance work?
An advance is money paid to the author upfront, against future royalties. If you receive a $10,000 advance and earn $1.50 per copy, the book has to earn $10,000 in royalties before you receive more. That point is called earning out. In standard contracts, authors generally do not have to repay an advance if the book does not earn out, though there are exceptions, such as if the manuscript is never delivered.
How do ebook and print royalties differ?
In traditional publishing, print royalties are often based on list price and ebook royalties on net receipts, with different rates for each format.
In self-publishing, each platform sets its own terms. On Amazon KDP as of October 2026:
- Ebooks: a 70% royalty is available for US list prices between $2.99 and $12.99, minus delivery costs based on file size. Outside that range, the rate is 35% (Amazon Kindle Direct Publishing, n.d.-a).
- Paperbacks: 60% of the list price minus printing costs for books priced at $9.99 or more, and 50% for lower prices. KDP's example: 0.60 × $15 − $5 printing = $4 per copy. Expanded Distribution sales earn 40% minus printing (Amazon Kindle Direct Publishing, n.d.-b).
| Traditional (hypothetical) | Self-published on KDP | |
|---|---|---|
| Hardcover | 10% to 15% of list | Rate minus printing |
| Paperback | 6.5% to 7.5% of list | 60% of list minus printing (at $9.99+) |
| Ebook | About 25% of net | 70% (at $2.99 to $12.99) or 35% |
| Upfront costs | Paid by publisher | Paid by author |
| Advance | Usually | None |
What should authors check in a contract?
- The royalty rate for each format, and any escalators.
- Whether each rate is on list price or net receipts, and how net is defined.
- Rates for special sales, deep discounts and book clubs, which are often lower.
- Reserves against returns: how much the publisher can hold back.
- How often you receive statements and payments.
- Your right to audit the publisher's accounts.
- What happens to royalties if rights revert.
For more on contracts, see questions to ask before signing a publishing contract. For the bigger choice, read traditional publishing vs. self-publishing, and see our publishing services checklist.
Thinking through your publishing options? Book a free consultation. For contract interpretation, always speak to an agent or a publishing lawyer.
References
Amazon Kindle Direct Publishing. (n.d.-a). eBook list price requirements. Retrieved October 18, 2026, from https://kdp.amazon.com/en_US/help/topic/G200634560
Amazon Kindle Direct Publishing. (n.d.-b). Paperback royalty. Retrieved October 18, 2026, from https://kdp.amazon.com/en_US/help/topic/G201834330
Gardner, R. (2010, December 1). Royalty rates. Rachelle Gardner. https://rachellegardner.com/royalty-rates/