Maybe You Shouldn’t Quit Your Job Just Yet

I’m back from the long holiday & birthday weekend… thanks for all the great birthday comments yesterday and thanks for the 181 responses to my Guest Blog Challenge! It’s going to take some time to get through them, so please be patient. Hope your holiday was terrific!

Today I’m going to discuss the cold, hard reality of the finances of being a published author. Many writers have an ultimate goal of quitting the “day job” and writing full time. Your ability to do that will depend on numerous factors, not the least of which is the amount of income your lifestyle requires and how many people you’re supporting. As you think ahead to the time when you’re making money from writing books, you may need a clearer picture of what it might look like. Lucky for you, I can help.

Advances are paid in two, three, or even four installments, over a period of time that could be a few months to two years or more. The agent’s 15% will come off the top. And you have to remember that no taxes are taken from advance checks like they are when you’re employed, so you’ll probably want to be setting aside another 20% or so from each advance check to pay the IRS when the time comes. Let’s run some numbers:

Example: a $10,000 advance

After agent commission: $8,500 to author

Paid in halves: You will get two checks, several months apart, for $4,250 each. If you set aside 20% for taxes, that leaves you about $3,400 to spend.

Paid in thirds: You will get three checks, several months apart, for $2,833. If you set aside 20% for taxes, that means you’ll have $2,266 to spend. Perhaps it will cover the rent or mortgage payment for a month or two. But it’s not exactly a kitchen remodel.

Example: a $50,000 advance

After agent commission: $42,500 to author

Paid in halves: You will get two checks, several months apart, for $21,250 each. If you set aside 20% for taxes, that leaves you $17,000 from each check.

Paid in thirds: You will get three checks, several months apart, for $14,166. If you set aside 20% for taxes, that means you’ll have $11,333 from each check.


Your contract specifies whether your advance will be paid in halves, thirds, or quarters. Typical payouts occur as follows:

Halves: You’ll get your first payment a month after signing the contract, and your second payment a month after the publisher has declared your manuscript “acceptable” which is usually after you’ve delivered it and gone through the entire editorial process.

Thirds: You’ll get your first payment a month after signing the contract; your second payment a month after the publisher has declared your manuscript acceptable; and your final payment upon publication of your book (which, as you know, can be a year or more after you signed the contract).

Quarters: You’ll get your first payment a month after signing the contract; your second payment a month after the publisher has declared your manuscript acceptable; your third payment upon publication of your book; and your last payment a year after publication (that could mean the last quarter of your advance doesn’t get paid until two years after you signed the contract).

One of the things a good agent will do for you is negotiate not only the size of the advance, but also the best possible payout terms. However, something to be aware of is that a couple of the larger publishers have mandated that for advances over a certain amount (usually six figures), payouts are in quarters, no exceptions, and they’re not negotiating on this point. With smaller advances, most pubs are still paying in halves or occasionally thirds.

Any questions about advance payments?

Rachelle Gardner

Literary agent at Gardner Literary. Coffee & wine enthusiast (not at the same time) and dark chocolate connoisseur. I've worked in publishing since 1995 and I love talking about books!


  1. Trevor on September 15, 2009 at 3:30 PM

    >If everyone were paid the way authors are paid the tax system would be a little bit different.

  2. Terresa on September 11, 2009 at 11:56 PM

    >Fabulous nuts and bolts post. Thank you for the wake up call to reality.

  3. Anonymous on September 10, 2009 at 9:00 AM

    >Another problem: the release of our advance payments is triggered by actions on the part of our editors as well as ourselves. If your editor gets things done very, very slowly or backburners you for a few months/years your money isn't going to be coming in when you thought it would.

    And if the publisher pushes your publication date back a year or two, that pushes your final payment back a year or two as well.

  4. Mariana on September 9, 2009 at 3:30 PM

    >Hi Rachelle! Very objective and educating this post. Thank you for that!
    Ah, a late happy birthday to you. I wish you a fantastic year for you, with gret success and happiness. πŸ™‚

  5. Anita Mae Draper on September 9, 2009 at 10:26 AM

    >Thank you, Rachelle. I really need things like this to be spelled out the way you presented it. Copy and paste, here I come.

  6. Shelly @ Life on the Wild Side on September 9, 2009 at 9:16 AM

    >Oh sweet mystery of life!! I'm so glad I found this. Not that I'm anywhere near being published, but this is one of those questions I've always wondered about but nobody ever seems to want to talk about. Thank you for your dose of brutal reality.

  7. Caroline Starr Rose on September 9, 2009 at 8:37 AM

    >I did quit the day job, setting aside much of last year's pay. I'd been a stay-at-home mom for six years and had returned to teaching for two.

    My income has always been supplementary, though walking away from a steady salary has forced us to be financially creative. Still, I am thrilled I decided to do this.

    I like to think of myself as an author in residence!

  8. Anonymous on September 9, 2009 at 5:41 AM

    >What is the typical advance range for an unpublished author's first novel? What factors play the biggest part in determining that advance? Lance

  9. Lisa on September 8, 2009 at 10:31 PM

    >When I decided to go into writing a decade ago, this is exactly why I chose freelancing over writing a book. It's easier to sell, the pay comes in faster, and the ability to actually make a living at it doesn't hinge on a single publication during a twelve-month period. (Although I would still love to sell a book to a publisher.)

    That being said, I took a part-time contract position recently doing PR, Marketing and Sales. It pays far better, and I've found I'm pretty good at it. But the job satisfaction? Not nearly as much – no ownership of the finished product, no excitement of creating an idea, convincing someone else that it is worthwhile, and then scoring real cash to bring that idea to reality. Now the effort of creating a marketing plan, crafting a good PR strategy, keeping up with social networking – it's all for someone else's ideas.

    Day jobs may pay the bills faster. But they can also leave the soul poorer in the process.

  10. Robert A Meacham on September 8, 2009 at 10:25 PM

    >I am curious about the advance Dan Brown got and in what time span he would receive for the 5 million copies of The Lost Symbol?

  11. Mechelle Fogelsong on September 8, 2009 at 8:53 PM

    >Isn't the author supposed to use at least some of the advance to pay for promotion? How does that work?

  12. Eileen on September 8, 2009 at 7:10 PM

    >My third book will come out this January. While I've been able to reduce to working part time, I still haven't been able to make the leap to writing full time. As Timothy mentioned in addition to paying out your agent and taxes, there can be a fair bit of expenses. Some people I know spend a significant amount of their advances on marketing. The other issue I warn people about is that publishers can be slow. You sell your book, then it can be a couple months until they get a contract to you. You sign and then it can be another month or so until they send the check. If you need money on a regular schedule this can be a challenge.

    The other factor that can hopefully move you into working full time as a writer is your back list. If a reader likes your current work they will go back (hopefully) and purchase those books.

    Writing is not a get rich quick plan- but I'll admit seeing your book on the shelf is PRICELESS.

  13. Krista Phillips on September 8, 2009 at 5:52 PM

    >Very insightful post. Obviously I have no illusions of quitting my day job (please note this for someone from my job who may google my name and find this comment… lol!) BUT… should my husband do the unthinkable and get a full-time job himself (that pays decent) AND I get published… then all bets are off. But… I'm not polishing my resignation letter yet, let's just put it that way!

    For the guy with the tax question… as a semi-tax geek myself, a simple note that if you are publishing your book… what you make will be INCOME to you regardless and reportable to the IRS, so you definitely want to claim your expenses against it to lessen your taxes! You don't have to create a "business." If you are making money on the side… whether from writing a book or other "hobbies", you're in essence a "sole-proprietor" so get ready to meet Uncle Sam the following April.

    I'd highly, highly suggest letting a tax professional help you along in your taxes to keep you out of trouble and to make sure you don't overpay your Uncle too.

    Sorry… my numbers geekness got the best of me. Is it weird that I actually find figuring out taxes enjoyable? (no need to respond to that… I already know the answer!)

  14. Donna Frank on September 8, 2009 at 4:04 PM

    >I wasn't able to quit my day job but God did allow me to shift it. I used to work in ministry (which requires the normal 27 hr day) and barely had time to sign my time card. I asked God to open a door for me to be able to write and still pay my bills. I now manage a self-storage facility for a businessman that goes to my church.
    It's not all skittles and sunshine, but I sent my first query out last week.
    I tell people that if it's possible for them NOT to write, then they should just lay it down and enjoy life. For those of us who must write, God will make a way. I have a quote posted in my office that says, "There's nothing to writing. All you do is sit down at a typewriter and open a vein." (Walter Wellesley 'Red' Smith).
    Love your blog, Rachelle. Thanks for all your help.

  15. Timothy Fish on September 8, 2009 at 12:37 PM

    >Jim Marr,

    You might want to look at It is the IRS' explanation. In addition to the cost of goods sold section, one other thing to take notice of is the stuff about not-for-profit activities and presumption of profit. The IRS expects you to make a profit in 3 out of 5 years if you are deducting expenses.

  16. Andrew on September 8, 2009 at 12:32 PM

    >Boy, am I glad I enjoy my day job!!!!!

  17. Timothy Fish on September 8, 2009 at 12:16 PM

    >While you guys are making out your pie charts, you might want to consider how much of that advance you are going to put back into you writing. Even driving down to the local Barnes and Nobel to turn your books face out takes money. There’s also expenses like websites, stock photos, software, book signings and promotional items. Much of it is tax deductable, but it ain’t free. If we are going to do our accounting properly, we should charge these things to the project before we even consider taking out such things as savings and household expenses.

  18. Bridget Chumbley on September 8, 2009 at 11:20 AM

    >Thank you Rachelle. The generous 'tips' you provide are so helpful for me to learn how this whole process works. Every post teaches me something I NEED to know.

  19. Dara on September 8, 2009 at 11:12 AM

    >If I got a 50K advance I'd be able to quit the part-time job πŸ™‚ May not be able to with the 10K one but who knows…the secretary job I have now is certainly not what I picture myself doing the rest of my life πŸ˜›

    Thanks for the break down–I didn't realize there were so many ways it could be split (halves, thirds, quarters…) I think I like the halves one the best! πŸ™‚

  20. Cassandra Frear on September 8, 2009 at 11:02 AM

    >No questions. Just a pat on the back.

    181 entries for the blog contest? You're a good sport. For having the contest in the first place. For reading (seriously) each entry.

  21. Cliff Graham on September 8, 2009 at 10:53 AM

    >This is an extremely valuable post for new authors. I would also add that even if you get the big movie deal, that takes significant time as well. I just signed a six figure contract for the film rights to my book, but I won't see the whole amount until two years from now. So if you are looking for Hollywood to save you, like she says, don't quit the job just yet.

  22. Rachelle on September 8, 2009 at 10:53 AM

    >The agent gets paid as the author gets paid. 15% of each check.

  23. Anonymous on September 8, 2009 at 10:45 AM

    >It wasn't clear to me whether the agent takes the entire 15% off the first instalment, or takes 15% OF EACH as they are paid.

  24. Jill on September 8, 2009 at 10:10 AM

    >Writers spend so much time in an imaginary world that sometimes reality bites. Still, since we do actually have to live in reality to some extent, it's best to face it.

  25. Kim Kasch on September 8, 2009 at 10:08 AM

    >Looks like a get-rich-slow scheme.


  26. Rachelle on September 8, 2009 at 9:48 AM

    >Shelli, I'll answer your question and others in tomorrow's post.

  27. lynnrush on September 8, 2009 at 9:36 AM

    >Awesome post. It's nice to see it broken down like this.

  28. Shelli on September 8, 2009 at 9:04 AM

    >in your experience – what is the average advance $ amount? debuts vs others?

  29. Dee Yoder on September 8, 2009 at 8:49 AM

    >Wow. Very informative. I wondered how it all worked. Thanks!

  30. Roxane B. Salonen on September 8, 2009 at 8:36 AM

    >Authors are rich, just not in the usual sense of the word in most cases. It's the little secret we keep (shh, don't tell Hollywood!) that keeps us writing. Christian authors have it even better because we know we can't take it with us anyway. However, if we're lucky, our words will endure beyond our earthly lives. And that…is priceless. πŸ™‚

  31. Sharon A. Lavy on September 8, 2009 at 8:28 AM

    >And people think authors are rich. Don't we all wish!

  32. Lisa Jordan on September 8, 2009 at 8:26 AM

    >So much for Hollywood's portrayal that I can quit my day job and drive my expensive sports car to my expensive lunch to shmooze with a producer who is dying to buy the film rights to my novel. LOL!

    One of my "normal" friends asked if I'll be rich when I sell my first book. I laughed and told her not as far as money is concerned.

    Thanks for the information and breakdown about advances. I'll file it in the "things to remember when book is sold" file. πŸ™‚

  33. Lynnda - Passionate for the Glory of God on September 8, 2009 at 8:14 AM

    >Good morning, Rachelle.

    I have a couple of questions.
    Are publishers usually prompt in fulfilling their advance payment obligations?
    Do you know if any publishers have been unable to meet their advance payment schedule due to their own cash flow problems?

    My cash flow profile from publishing my first book will look like this:
    15% agent fees
    10% tithe
    30% federal and state taxes
    10% savings
    45% household expenses
    00% cruise to Alaska.

    Never mind, on the day I sign the contract with the publisher I metamorph from aspiring writer to published author. That will be more than enough.

    Be blessed!


  34. Marla Taviano on September 8, 2009 at 8:07 AM

    >I pick the $50,000 advance. In halves, please!

  35. ginny martyn on September 8, 2009 at 7:24 AM

    >Geeze Rachelle, now I have to cancel my order for Puddin’s diamond encrusted doggie penthouse…thanks a lot!

  36. Jim Marr on September 8, 2009 at 7:16 AM

    >On a related topic: Are there any books out there about doing taxes for custom book publishing? (what a concept, a book!!) I'm debating whether I should really consider this a business or just a hobby since I'm just planning on this one book. I'll be incurring a significant number of deductions, but I've seen different opinions about whether the deductions are just expenses vs. "cost of goods sold". I'd appreciate any pointers to resources you know of. I need to get smart on this before the book comes out next Spring/Summer (WinePress Books). Well, sooner if I must claim deductions for this year before I sell my first book.

    God Bless,

  37. by Pegg Thomas on September 8, 2009 at 6:11 AM

    >Wow… what a cold dose of reality. Thanks for the facts. πŸ™‚

  38. Book Maven on September 8, 2009 at 4:34 AM

    >It took me many years to realise – probably only got it sorted five years ago – that I get to keep more or less half what I earn.

    Agent gets 10% (we have been together 25 years or more), I pay 40% tax on the remaining 90%.

    So I forget things like allowances and expenses and work out that for every Β£1 in the contract, I reckon on spending or saving 50p.

    Once I have realised this, it's easier to calculate what I can afford to do. Of course it's still the case that royalties are incalculable and the only sure income is from advances, particularly in these dire times.