How We Calculate Royalties

Royalties

How often do you pay royalties?

We pay royalties twice a year:

• By Dec 31st for May–October
• By June 30th for November–April

Where can I find out how many royalties I am due?

You can see your royalties in the ROYALTIES table on your Financials page.

How do you calculate my royalties?

Here follows an explanation of how we arrive at the figures displayed in the ROYALTIES table on your Financials page.

Please note: The figures on your Financials page are in £ sterling. If you are outside the UK, we normally pay via Barclays.net, meaning your bank converts the money to local currency and the rate is set by them. If we pay via Comerica, our bank in the US, then it's the average rate for the month, as dictated by HMRC. Read Royalty Payments for more information.

Period

The period for which the statement has been compiled (May to October or November to April).

Trade sales

These are taken from the Total sales column from the SALES tables on your Financials page.

• The Total units figure is the sum of the Total units column for the royalty period.
• The £ shown is the sum of the Value column for the royalty period.
• They include Author sales.

This applies to the ebook table also.

NB: Your sales total is a net amount. This means discounts to booksellers have been taken off. Different booksellers have differing discounts. For example, a wholesaler would have a different rate than an independent single bookshop. The total we receive, therefore, depends where the book is bought and which discount was applied. It is entirely possible that the same number of books sold would generate a different amount of income over separate royalty periods.

Author sales

These are deducted from the trade sales figures, as we do not pay royalties on author sales.

These are manually inputted by us, taken from reports from our North American and UK distributors, and Office Sales.

This column will not apply for ebook sales.

Returns Provision

This provision used to be standard on all publishers' contracts (and often still is), to protect from them from large numbers of books coming back from the trade in returns. We dropped it on new titles from October 2012 onwards, but the column remains on the system for historical information. It need not be a concern for you.

Royalty %

This is taken from your contract terms, which you can check at any time by clicking on Contract on the left-hand menu. It should match the current sales level your title is on.

Royalty on trade sales

The calculation is trade sales, less author sales, plus/minus returns provision (if applicable), and when we have this figure, we apply your royalty rate. This is how we come to the royalty on trade sales.

Royalty on foreign-rights sales £

This will apply the foreign rights sales % as per your contract terms, to any foreign rights amounts received in the period (see Foreign Rights Sales table in Sales section).

This is not applicable for ebook sales.

Deductions/Additions

These are any adjustments we need to make to your royalty payment.

Additions are signified by A in the Type column.

Deductions are signified by D in the Type column.

The most common are:

• Balance Bfwd: This amount should match the figure carried forward from your previous royalty period.
• Production costs: To be passed on to author (if agreed with author).
• Royalty on pre-sales: The ROYALTIES section of your Finance page does not show the sales of a title from the period before its publication date. If this is your first royalty statement and your title had sales prior to the period, we will add the royalty for these sales in as an addition. You will be able to check the sales in your sales table for any prior months and we then apply your royalty %.
• Band crossover: Deductions may need to be taken from your royalty amount at the end of a 6-month period if your book has, in that time, passed a sales threshold that changes the royalty percentage. This will be done when the statements are finalized at the end of June and December each year.
• We used to show ebook cost deduction here, but as of December 2018, we no longer charge to create ebooks.

Royalty Payable

This is the royalty payable to you, calculated as follows:

• Royalty on trade sales
• + royalty on foreign-rights sales
• +/- additions/deductions.

We then apply the author split (as per your contract) if there are multiple authors to give us the amount owed to each author.

If you have an agent, we will automatically pay them this amount.

If it is blank, see Unearned Carry Forward below.

Unearned Carry Forward

This means that no amount is owed to you for this period, and the figure will be negative.

This is because there were either net returns for the period, more amounts deducted than royalty owed, or a negative amount was brought forward and the royalty still hasn’t earned through (see above for each separate point).

This figure will be shown under deductions in your next statement.

Other info

• We will add together the royalty amount owed to you for both physical and ebook sales and pay you the combined total (a negative ebook amount or paperback amount will mean a deduction from the total).
• For the principles of why our royalty terms are as they are, please view the relevant sections on the contract in Chapter 6.
• If you have any queries regarding your royalty statement, please post on the forum in the Royalties section.

We try to respond to queries quickly, but appreciate your patience in the period just after statements have been issued.

Agents

If your title has come to us through an agent, they will be listed on the contracts page, payment will be made to your agent, and they will make a corresponding payment to you, minus their agreed %.

Charities

Due to our high volume of authors and payments, unfortunately, we cannot split percentages to anyone other than authors or agents. If you would like to donate a portion of your royalties to a good cause, you will have to make it directly.

Multiple authors

If a book has two or three named authors, we will split the royalties equally, unless advised otherwise.

How do I print a royalty statement?

• Go to your Financials page and scroll down to the ROYALTIES section
• Find the row royalty period you would like a statement for
• The last column, Action, will have a link titled Open statement
• Click on this and your statement will open in Microsoft Word

You should then be able to save it to your computer/print it as you wish.

If you have any queries about late payment or wrong payment of your royalties after reading this, please add them to the Royalties section of the Author Forum in Sales & Distribution.

VAT

For some authors, in UK and Europe, who are registered for Value Added Tax, we need an invoice from you for the royalty payment, so we can reclaim the tax. Please send the invoice to accounts@jhpbooks.com.

If you are not registered for this (the vast majority), you do not need to do anything.

Ebooks

As of December 2018, we have stopped charging a conversion cost for ebooks on new titles.

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