Translator Book Contract

Payment terms in translation contracts vary widely between publishers. The Translation Model Contract's payment provision lays out conditions and rates that are favorable to translators and achievable based on contracts that we have seen.

 

List price vs. Net Receipts

 

Trade royalties today are calculated on either (1) the book's suggested retail (otherwise known as "list" or "cover") price of the book or (2) the publisher's net receipts, which are typically defined as the amounts received by the publisher after the deduction of taxes and any discounts given to booksellers or wholesalers have been deducted. Most translation publishers with royalty schemes built into their translation contracts calculate royalties from the list price on sales of physical copies; royalties of 2% based on list price is the rate we see most often nowadays. However, some publishers calculate royalties for sales of physical books based on net receipts (similar to the way in which electronic, audio, and subsidiary rights royalties are calculated). Note that royalties calculated on net receipts tend to be 40–50% lower than royalties paid on the book's list price at the same percentage. This is because the  amount received by the publisher for each book, after deducting taxes and bookseller discounts, tends to be about half of the book's list price. In other words, a royalty rate based on net receipts would have to be 5% to generate earnings more or less equivalent to the earnings you would get at a royalty rate of 2% based on list price. Since "net receipts"  are determined by the publisher—unlike the list or retail price, which is usually printed on the book—it is crucial for your contract to clearly define them, and to state any allowable deductions prior to calculating the royalty amount, in the contract, as for example in Clause 4(d) above.

Almost all publishers calculate earnings from electronic, audio, and sub-licenses as a percentage share of their "net receipts," in part because each sale from these channels is not individually recorded. The percentages laid out in Clause 4 reflects the current prevailing practice among many translation publishers.

 

Calculation of Fee

 

Most translators in the U.S. work on a per-word fee basis, with the rate calculated per one thousand words. For a variety of reasons, however, we recommend that you negotiate a flat fee for the translation, based upon the number of words in the original work and the time you estimate it will take you to translate it (taking into account any factors such as significant research, a particularly challenging style, and so forth).

 

In many languages, there is a significant difference between the word count of the foreign-language text and the English translation. As a result, more and more translators prefer their fee to be based on word count but not determined by it. You may do this by agreeing with the publisher that the fee stated in the contract is simply an estimate and that your final fee will be based on the actual word count. (In this case it is also important to clarify whether the word count will be based on the manuscript you submit, rather than the final version, since often the final version is shorter.)

 

The example below illustrates a per-word rate clause akin to what you might see in a contract where a flat-fee payment is used:

 

The Translator will be paid at the rate of $___per 1,000 English words, based on the final word count. The Translator estimates that the length of the Translation will be ___English words. Both parties understand that this is only an estimation, but the Publisher will calculate the Translator's initial half of the fee, due upon signature of this agreement, to be $ _____.

 

A per-word fee may be accompanied by royalty payments or it may be the only form of payment. We encourage every translator to ask for royalties.

 

In negotiating your fee, take into account the difficulty of the text and any other factors that might complicate the translation process. A survey of literary translators conducted in 2017 by the Authors Guild found pay rates ranging from $0 to more than $0.20 per word for prose translations, with the two largest segments charging $0.00–$0.07 per word and $0.14 or $0.15 per word, closely followed by $0.10 per word.3  In light of these responses, and as we stated in our summary of the 2017 survey, it is clear that a large number of U.S. translators are being paid rates that make it difficult, if not impossible, to earn a living, so we continue urging translators to ask for fair compensation and publishers to provide it. Also bear in mind that the fee is not the only compensation a translator may receive for their work. Translators who are paid a low per-word fee, for example, may negotiate a higher royalty rate.

 

Regardless of fee, however, your contract should make clear the following:

 

●          You will receive full payment if you deliver the translation as commissioned (even if it is never published);
 
●          If the contract states that your payment, or any part of it, is dependent on the publisher receiving funding in the form of a grant or subsidy, the sum you will be paid if that funding is    not received (see below, "Payment of Fee Dependent on Grant or Other Subsidy");
 
●          If the contract obligates you to do any work other than translating (e.g., research, introduction, afterword, glossary, index), that work should be clearly itemized and you should be paid a separate fee for it.

Although U.S. law does not allow professional organizations such as the Authors Guild to recommend minimum rates, we are committed as part of our core mission to ensuring that working writers and translators are able to earn a living through their craft and profession. As we continue to review publishing contracts for translators as part of the member benefits we offer, we plan to keep information about translators' working conditions up-to-date, and incorporate it into our advocacy for fair pay.

 

3 2017 Authors Guild Survey of Literary Translators' Working Conditions: "A Summary," Authors Guild, Dec. 15, 2017,

https://www.authorsguild.org/wp-content/uploads/2017/12/2017- Authors-Guild-Survey-of-Literary-Translators-Working-Conditions.pdf

 

Payment of Fee

 

Payment of translator fees is usually divided into two or three segments. If two, the first half is typically paid within 30 days of the translator signing the contract and the remainder within 30 days of the date the translation is delivered (or accepted; see Clause 2, Delivery of Work). Although we do not recommend this arrangement, we have also seen contracts that split the translator's fee into three payments: one-third on the translator signing the contract, one-third on delivery (or acceptance) of the manuscript, and one-third on publication of the translation.

 

Some publishers may offer you a contract making the second half of your payment contingent on "acceptance" of the final translation. Acceptance could mean anything from approval by a third party to approval by the author of the work to approval by an editor employed or hired by the publishing house to completion of the editorial process between the translator and the editor. The Authors Guild recommends that translators obtain the second half of their payment on delivery of the manuscript whenever possible.

 

Payment of Fee Dependent on Grant or Other Subsidy

 

Publishers of translations often carry out their publishing programs with the help of grants and third-party subsidies. But because receipt of these funds is not and cannot be guaranteed, a publisher may offer you a contract that builds this uncertainty into the translation fee: A minimum amount of "X" is guaranteed, with a larger sum of "Y" promised only if the grant or subsidy is received.

 

If you are offered a contract that makes payment of your fee contingent upon the publisher receiving a grant or subsidy, you should ask the publisher the following questions: Which grant or grants will the publisher apply for and in what amount? Has the publisher received grants from this source in the past? When will the publisher find out whether or not the grant has been awarded? What other titles has the publisher translated with the help of grants, and were the translators paid in full in the end? Ask the publisher to be as up-front as possible about which grants or subsidies they are applying for and their success at getting them from those sources in the past.

 

You should also consider whether or not, in the worst-case scenario, you are willing to accept the minimum amount being offered. If not, you should negotiate it up to an amount that you consider acceptable. Remember that by signing the contract you agree to deliver a finished manuscript. The publisher, on the other hand, is obligated only to pay you the minimum amount stipulated in the contract.

 

If there is any ambiguity about whether payments made to you from grant receipts will be treated as a fee or an advance against royalties, be sure to clarify that these additional payments will not count against royalties.

We strongly recommend against signing a contract that makes payment for your work entirely dependent upon the receipt of a grant or subsidy from an outside source.

 

Royalties

 

The payment provisions in this model contract assume that royalty payments commence from the sale of the first book. In reality, most translation contracts treat the translator's fee as an advance against royalties, in which case royalty payments will begin only after the translator's advance has "earned out."

 

A book is said to have "earned out" its advance when the royalties from sales are greater than the advance—or, in this case, the fee—that the publisher paid. For example, let's say you negotiate a fee of $180 per thousand words, or $0.18/word, on a novel of 80,000 words. Your fee will be $14,400. If you negotiate royalties beginning from the first copy sold, at a royalty rate of 2% on list price, and the book's list price is $16.95, you will earn an additional 33.9 cents for every copy your translation sells. If, however, your contract stipulates that your fee is an advance against royalties, the publisher will not begin sending you royalty payments until the book has sold 42,478 copies ($14,400 divided by 0.339 = 42,477.87).

 

Although there are publishers who use these figures to argue that it is pointless to give translators royalties, citing the unlikelihood of a book selling that many copies, we see this on the contrary as an argument in favor of translators negotiating for royalties from the first copy sold. In addition, there is also the principle at stake that translators, as creators of the translation, are entitled to royalties for the same reason that they are entitled to copyright—a fact recognized in United States copyright law. Finally, it is important for translators to negotiate royalties as an "insurance policy," if you will, to make sure they aren't deprived of earnings in the event that the book sells better than expected. If a publisher resists granting royalties from the first copy sold, one other negotiating tack translators can take is to suggest that their royalties start after a certain sales threshold has been met. Ask for as low a sales threshold as possible (e.g., 500 to 700 copies).

 

Note, too, that you stand a good chance of negotiating a higher royalty rate if the original work has gone out of copyright, since that means the publisher will not be paying royalties to the author.

 

In regards to Clause 4(b)(i), many publishers pay a royalty of 2% of the list price of any physical (hardcover and paperback) copy of the translation. If your publisher pays royalties on net receipts rather than list price, you should try to negotiate a royalty closer to 4%, as this approximates the list price royalty. 

 

In regards to Clause 4(b)(ii), electronic royalties, most traditional publishers are currently paying authors a flat 25% of the publisher's net receipts from ebook sales, while paying translators up to 5% of net receipts. In our view, 5% is low and we would like this rate to be 10 to 15% of the publisher's net receipts, but few if any publishers have been willing to go beyond 5%. We will continue to advocate for better electronic royalties for translators.

In regards to Clause 4(b)(iii), many publishers are paying 2% of their net receipts on physical copies of the audiobook.

 

In regards to Clause 4(b)(iv), while many publishers are offering only 2% of their net receipts from the digital version of the audiobook, we believe this rate does not account for the cost savings associated with digital versus physical editions. Accordingly, we believe translators should try to negotiate a royalty rate of at least 5% of the publisher's net receipts, as this is comparable to the ebook royalty and at least starts to account for the cost savings associated with digital copies, which are cheaper both to produce and to distribute.

Escalating Royalties

 

Translators whose work is in demand and who have a track record of strong sales on previous work may be able to negotiate an escalating royalty arrangement for sales of physical copies; for example: (1) 2% (two percent) of the list price on the first 2,000 copies sold; 2.5% (two-and-one-half percent) on copies 2,001 through 4,000; 3% (three percent) on copies 4,001 through 10,000; 3.5% (three-and-one-half percent) on 10,001 or more copies.

 

Note that we have provided escalation increments of 2,000 copies as an illustration. Escalations in trade publishing contracts typically occur in increments of 5,000 copies. However, because many translations are printed in smaller runs, we recommend that translation agreements escalate in smaller increments, such as 2,000 copies.

 

Subsidiary Rights

 

The rates described in Clause 4(c) pertain to rights that are licensed to a third-party publisher, otherwise known as "subsidiary rights" (see Clause 1(b) and Commentary) and should mirror the rights granted under Clause 1(b). We recommend trying to negotiate for 25% of the publisher's net receipts for all rights licensed to third parties, with the exception of dramatic rights, English-language licensing, and rights to create relay translations. It is important to request a percentage of subsidiary income, since that may enable you to earn out your advance faster than you would otherwise.

 

Note that three of the formats listed in Clause 4(c) overlap with Clause 4(b) but indicate different percentages. This is because 5(b) applies to primary rights—that is, when the publisher itself produces an ebook or hardcover copy of the translation—while 5(c) covers situations when a publisher allows a third party, such as a foreign publisher, to exercise those rights in its place. In the latter scenario, the licensee produces the books and gives your publisher a cut of the income, from which your publisher distributes your share to you (25% of whatever your publisher receives from the license). As a practical matter, most publishers nowadays exploit paper and electronic rights on their own, and many large publishers, such as Penguin Random House, who have audio production facilities, create their own audiobooks. That being said, you should be aware of the distinction between primary and subsidiary rights so you can negotiate for appropriate royalty rates or licensing share, or both, as the case may be.

 

As discussed in our commentary pertaining to the Grant of Rights (Clauses 1 and 2), if you are unable to reserve the right to use your translation in derivative works, then you should negotiate an appropriate licensing fee for their use. Motion picture and uses of literary works in dramatic media can earn authors up to 90% of the publisher's net receipts. If your translation is the gateway for a film or other high-value media, then you should ask for at least a 40–50% of the publisher's net receipts. In other cases, 30–40% of the publisher's net receipts is a reasonable bottom line.

 

Similarly, if the publisher is licensing your translation to create another translation (a "relay translation"), then you should get a higher share of the publisher's net receipts, at least 35–40%. In trying to assess a value range for subsidiary rights licensing fees, a good rule of thumb is to ask yourself whether the new work could exist without your translation.

 

English-language Territories

 

Publishers that acquire world English rights from the author will often request world English rights from the translator too. This enables them either to publish the English translation throughout all the territories granted, or to license the translation to another publisher in another English-language territory for a fee. In the latter case, the translator may negotiate a one-off share of the licensing fee, with the proceeds offset against their advance the same way royalties and subsidiary income are. However, rather than granting the publisher world rights, some translators may wish to reserve rights for additional territories themselves, allowing them to enter into separate agreements with English-language publishers in territories other than those in which the original publisher will be distributing the translation. This allows the translator to negotiate directly with publishers in any additional English-language markets for a royalty rate similar to those discussed in Clause 4(b) from the publishers' editions in the translator's home market.