If you think about it, literary agents carry a lot of risk. They don’t get paid unless an author gets paid, which is a big reason they need to be selective when it comes to who they represent.
Literary agents typically receive a 15% commission on domestic royalties earned by the author, 20% from foreign sales and translations, and 15%-20% of any income derived from television deals or screenplays. Reputable literary agents do not charge money to review query submissions or manuscripts.
The intention of this article is to share insight into how a literary gets paid, the rules that govern what they are allowed to charge clients, the nature of your relationship with a literary agent, and the average annual salary a literary agent earns in not only New York City, but in every state from coast to coast.
Table of Contents
- Standard Commission Rates for Literary Agents
- History of Literary Agent Reading Fees and Evaluation Fees
- Reputable Agents Don’t Do These Things
- Association of Author’s Representatives, Inc. (AAR) Canon of Ethics
- Agency Agreement Guidelines from the Authors Guild
- Requirements to be a Literary Agent
- 4 Ways Literary Agents Get Paid
- The Average Annual Salary for a Literary Agent
- Where to Look for a Literary Agent
Standard Commission Rates for Literary Agents
The following sections outline standard commission rates that literary agents receive for domestic sales, foreign subsidiary rights and translations, and film rights and audio books.
Literary agents typically take 15% of your royalty payments (including your advance) from the sale of your book to a publisher in the United States (before taxes). Here’s a chart of what that would look like based on the initial sale of your book:
|Advance Against Royalty||Author Total (85%)||Agent Total (15%)|
Some literary agents may ask for more than the customary 15% commission rate, and you’ll have to decide if it’s worth it or not if you do. But if it were me, I’d negotiate and tell them you’re only willing to let them take 15% or I’d move on (unless you really want to work with that agent).
Foreign Subsidiary Rights and Translations
Literary agents receive a bit more for foreign subsidiary rates and translations. In fact, they typically get a tend to receive a 20% commission. What this 20% commission. The advances are typically much smaller on the foreign rights, but if you can secure enough foreign translations it can add up. Here’s how that changes the table above:
|Advance Against Royalty||Author Total (80%)||Agent Total (20%)|
Film Rights & Audio Book Rights
The literary agent commission on film rights and audio book rights is typically somewhere between 15%-20%. You may want to negotiate to ensure you get the 15% rate.
It might not sound like much of a difference, but it can add up when you’re talking about the film rights to your book. Still, if you have the right agent and she has Hollywood connections, it might be worth paying a higher rate. 80% of something is a lot better than 100% of nothing.
Reputable Agents Don’t Do These Things
Most agents are wonderful people who will have your best interest in mind. They entered the profession because they love books and they love working with authors.
However, you you’ll want to play it safe and ensure you’re working with someone who is above board. Reputable literary agents make their money by receiving commissions after they sell your book. That’s it. Here’s a list of things that agents don’t do:
- Ask for commissions beyond the normal rates
- Reading Fees or Evaluation Fees
- Flat fees for their representation
- Monthly fees for their representation
- Fees for each submission
- Hourly rates for critiques or any other services
- Fees for adjunct service like a website or ads
History of Literary Agent Reading Fees and Evaluation Fees
There was a time when agents were allowed to charge a reading fee or an evaluation fee. At first glance, the logic is sound. After all, evaluating a manuscript takes time and living on commissions alone can be a scary proposition.
Literary agents get to exchange their time for some income and prospective clients get a shot at having a manuscript evaluated by real pros.
The Downside of Reading Fees and Evaluation Fees
Unfortunately, there’s a downside. If an agent reads a manuscript for a fee and doesn’t offer any constructive feedback—but you still get rejected—the value of that service becomes questionable.
So, some agents started to offer critiques along with their reviews, which had the potential to bring real value.
But it didn’t. At least not at scale.
Many critiques were provided by interns or unqualified employees who offered little more than uneducated feedback or templated responses that were the same for every manuscript.
Why Some Agents Charge Marketing Fees
In lieu of evaluation fees, some agents charge marketing fees in order to defray the cost of submitting manuscripts to publishers.
The good news is that those fees were much higher when hard copies of manuscripts were the norm. After all, sending 300 pages via FedEx or even a courier if the agent and editor were simply across town isn’t cheap.
So, it’s reasonable that agents would look for the authors to share in that expense. Today most business is done electronically so authors don’t end up with a very big bill at the end of the year.
Things like rent and utilities, travel, and assistants that allow them to sift through the thousands of query submissions they receive are normal costs of business that are not permissible to pass on to authors.
Association of Author’s Representatives, Inc. (AAR) Canon of Ethics
Founded in 1991, the Association of Author’s Representatives (AAR) has over 400 members that include both professional literary and dramatic agents. Agent members are required to follow both AAR’s bylaws and their Canon of Ethics. And the AAR has an Ethics Committee that deal with alleged ethics.
Agent members of the AAR pledge to never mislead, dupe, deceive, victimize, defraud, or subject their clients (or anyone they work with) to sexual abuse or any kind of harassment.
How Literary Agents are Required to Handle Author Payments
Members commit to take the responsibility to protect the integrity and security of client. If fact, literary agents who are members of AAR are required to keep client funds in a separate bank account.
They are required to pay authors in no more than ten business days after the money has cleared. If for any reason an author wants to audit her agent’s accounting records in relation to the authors’ income, you are allowed to do so. I’ve never done it, but I love the transparency.
Acceptable Fees That Literary Agents Can Pass on to Authors
Agent members are allowed to pass along charges that they incur on behalf of a client, with the client’s permission. Those charges include:
- Copyright fees
- Manuscript retyping
- Photocopies, copies of
- Long distance calls (which aren’t typical any more thanks to cell phones)
- Messenger fees (ex: have a courier bring an editor a hard copy of your manuscript)
I’ve never run into a problem with this one, but that doesn’t mean abuses don’t take place. Agents don’t want to nickel and dime you, but there are some costs that we as authors need to help with and that’s a fair ask on their part.
Remember, they take a lot risk by investing the massive amount of time it takes to help us make the sale. Having us cover some of the hard costs is a way we can show them we’re in the trenches with them.
A packaging deal is typically an idea for a series of books that starts by someone in marketing, not with an author pitching a new book idea.
Companies that look a lot like publishers typically have in house teams that do everything from concepting to designing to printing, and sometimes they hire outside help as ghost writers.
Examples of books and series that come from the packaging world are Gossip Girls, The Clique, and I am Number Four.
Agents can earn a fee in a packaging deal, but they can’t earn a packaging fee from the packing company as well as their typical commission from their client’s royalties.
No Secret Payments to Agents That Belong to Authors
Agents who are AAR members can’t take secret payments on top of their royalty commissions.
An example of that might look like a publisher paying an agent a separate finder’s fee for securing an author. I’ve never heard of that happening, but that’s why a clause like this exists in the AAR Canon.
Confidentiality of Client Income
Agents aren’t allowed to share private information about an author’s income without that author’s permission.
No Reading Fees or Evaluation Fees
This one is clean cut. Literary agents who belong to the AAR can’t charge money to simply read and evaluate a manuscript. They can’t even provide editorial services if they wanted to start a separate business.
I’m going to give a quick plug to Joanna Volpe at New Leaf Literary. I knew Joanna long before she represented Veronica Roth of Divergent fame.
In fact, when Joanna worked for my former agent, I signed a book deal with Thomas Nelson that her agency didn’t represent.
Joanna is an absolutely incredible story editor and I didn’t know about this rule, so I asked her if I could pay her as a freelance story editor for my Thomas Nelson series. She said that she couldn’t because of the rule, which I thought was silly at the time.
I already had the deal and I was uncomfortable asking for her insights for free. I wanted to pay her for her time as an editor not an agent. If memory services, she was still an intern at the time but she had amazing integrity and stuck to her guns.
I was disappointed in the outcome because I really wanted her insight but I am so appreciative of the kind of person Joanna is. You want that kind of integrity with your agent.
Agents Can Make Money for Appearing at Writers Conferences
If you look at the headline alone it’s no big deal. Why shouldn’t an agent be allowed to receive compensation for appearing at a writers conference? Here’s why that’s an important distinction.
The primary reason conferences pay agents to go to conferences is they want to promote that agents are going to review our manuscripts—and that we just might have a shot of signing on with one of them.
That means an agent is actually making money for reviewing manuscripts. I love that the AAR allows for this distinction.
It’s a great service to writers who have dreams of becoming professional authors, and it compensates agents for their time investment. After all, the conferences are making money. Shouldn’t the agents they market receive an honorarium?
If you’d like to review the entire AAR Canon you can find it on their website by clicking here.
Agency Agreement Guidelines from the Authors Guild
The Authors Guild the largest professional organization of writers in the country. It’s a group of artisans banded together in order to drive community, influence, and authority.
It promotes and defends the rights of authors to for fair compensation, copyright protection, far contracts, and fair tax laws. The Guild also work to ensure that authors are protected in their agreements with agents.
The Relationship Between a Literary Agent and an Author
A literary agent has a “fiduciary” relationship with an author, meaning that the agent must always act in an author’s best interests—that goes for everything from the relationship with your publisher to commercial dealings like film rights.
The Difference Between and Agency Agreement and an Agency Clause
Some literary agencies don’t work under written agreements. Instead, they rely on something called agency clauses that are inserted into the publishing agreements.
My belief is that it’s better to have the tough conversations up front, so try and push for that agreement. That way there won’t be any surprises when you get your publishing contract. You only want to negotiate with one entity at a time.
Do Agents Automatically Represent Everything You Write or Just Specific Manuscripts?
There’s a strong likelihood that you’ll stay with your agent for the better part of your career (if not your entire career), but that’s not always the case. Know that an agency agreement protects you in case you decided you need new representation.
In my experience, my agency agreements were for specific books not for everything that I wrote.
Of course, finding a different agent for every book or series you write isn’t terribly efficient, and you won’t attract too many agents if you go that route. However, technically it’s an option for you.
Agency Agreements are for a Specific Amount of Time
Typically, your agency agreement is for a specified amount of time, which protects both parties.
Agents do a lot of work when it comes to selling a manuscript, and they need to be protected against authors pulling out from a deal. But it also protects an author. If a book can’t be sold, it may be time to move to a new agent.
Exclusive Worldwide Rights
Under your agreement, an agent will receive exclusive worldwide rights to sell your manuscript, which makes sense.
You want your agent to have an incentive to sell your book, but if they only have rights in the United States, and you have different agents selling your foreign rights, you’ve taken away a revenue stream for them.
However—and this is a good thing—agents have the right to bring in agents who specialize in foreign markets to help them.
You still make the same amount, but it brings in specialty agents who know those markets, which increases the likelihood of sales.
How Long Agents Hold a Stake in Any Book Where They Negotiate a Contract
Know that the agent holds a stake in the books you write under your agency agreement in perpetuity (a fancy way of saying forever) or until you terminate the relationship under the terms of your contract. That’s why it’s better to do a lot of research up front.
Do your best to sign on with someone you can have a long relationship with knowing that if things don’t turn out the way you thought they would, you do have an out.
The Importance of a Termination Agreement
Nobody goes into a relationship or even a business partnership thinking it’s not going to work out, but we all know few things are forever. That’s why you need to make sure there’s a termination clause in your agency agreement.
If you choose to terminate your agreement, it’s important to know that the agency will be entitled to the commissions from any deals brokered before that termination.
That goes for publisher deals within anywhere from 90-180 days after the termination as well if the agency negotiated terms.
No Agency Commission Without Negotiating the Deal
Some agencies are going to want commissions from deals they pitched but didn’t negotiate. Whatever you do, don’t sign a contract where that’s the case.
Also, make sure any agency agreement gives you the right to a documented list of publishers where the agency has submitted your manuscript.
Oh, and one more thing. Whatever you do, don’t give an agency the right to sign anything on your behalf.
Authors Guild Recommendations on Agent Commissions
Just like above, the Guild believes that the industry standard for domestic sales is commission for agencies is 15 percent of the gross amounts payable to the author. When it comes to foreign rights agreements they adhere to the 20 percent of the gross amounts payable to the author
Most agreements outline that advances and royalties that are payable to the author are actually paid to the agency.
The agency then deducts their commission and pays the balance to the author within ten days. It’s fairly standard when it comes to agreements, but you’ll want to ensure it’s there.
Okay, back to the termination for a moment…
The agreement should outline that if the author terminates the agreement after the agent made a sale, that the agency will sign an amendment to the publisher that states the agency is no longer authorized to act as your agent.
It should also state that the agency’s commissions will be paid to the agency by the publisher but the rest will go straight to the author or the new agency.
Agency Expenses Paid by the Author
The agency is allowed to deduct from money for author expenses if they incur charges for things like postage, messenger services, photocopies of your manuscript, etc.
Just make sure you have to approve anything over a certain amount of money. The Guild recommends $75, but you may want to set a cap for total expenses. It’s a fairly easy conversation to have.
You can read the entire Author’s Guide to Agency Agreements from the Author’s Guild by visiting their website.
Requirements to be a Literary Agent
Though there are no specific educational requirements to become a literary agent, many have earned a bachelor’s degrees in English or literature, and some have even gone on to earn law degrees.
In fact, if you read the bios of agents at many of the most reputable agencies, you’ll see that they’ve graduated from some impressive universities.
Quite a few agents get their starts as interns or assistants to senior agents at large agencies. Some start their careers as booksellers and others as editors.
4 Ways Literary Agents Get Paid
There are four typical models to determine how literary agencies get paid.
- Commission: Agents on commission are paid when the authors they are paid. A commission-only pay structure can certainly drive performance, but it can also create anxiety that hinders performance. Agents will at times work side hustles to make ends meet until they are able to build a list that drives consistent income.
- Salary plus commission. Some agents are able to build their client lists as salaried employees who perform other functions at the same time. For instance, that could mean working as an assistant to a senior editor while they are building their lists.
- Draw. A draw is a lot like an advance for authors. It is money given to an agent from the agency against future earnings. It’s a fixed amount of money in anticipation of hitting targeted sales numbers. Once they earn back their draw, they start to earn commissions.
- Salary. There are literary agencies that pay agents a salary in exchange for their commissions. Agents in this pay model often make a salary plus bonuses for hitting sales goals.
The Average Annual Salary for a Literary Agent
According to ZipRecuriter, the average annual salary for a literary agent in the United States is $56,557 per year as measured on August 4, 2019. That breaks down to the following:
- $4,713 per month
- $1,088 per week
- $27 per hour
The largest group of literary agents (34%) makes between $26,500-$33,999. Two other groups each represent 11% of literary agents. One group earns between $34,000-$41,999 and the second makes $94,000-$101,500.
NATIONAL AVERAGE ANNUAL SALARY FOR LITERARY AGENTS
|INCOME||PERCENTAGE OF JOBS|
The average annual salary jumps from $56,557 to $61,862 when you shift the measurement from literary agents nationally to New York City as measured on August 4, 2019 by ZipRecruiter.
Here’s the breakdown for New York City:
- $4,713 per month
- $1,088 per week
- $27 per hour
Given the cost of living in New York City, the good news for literary agents is that 30% make at least $78,207. In fact, 11% make between $102,817-$111,021.
AVERAGE ANNUAL SALARY OF LITERARY AGENTS IN NEW YORK CITY
|INCOME||PERCENTAGE OF JOBS|
Where to Look for a Literary Agent
If you’re ready to start looking for a literary agent, I have some great resources that will help you in your search. In fact, I’d start with our list of middle grade literary agents, which we update regularly.
- The Definitive Guide to Middle Grade Literary Agents (2020)
- Publishers Marketplace
- Manuscript Wish List (Official)
- MS Wish List
- Agent Query
- Query Tracker
- Writer’s Digest Publishing Insights
- Association of Author Representatives
- Writing Conferences
Is it hard to get a literary agent? Getting a literary agent is difficult but it is not impossible. Agents are eager to find new talent but there is stiff competition. Each agent receives thousands of unsolicited queries every year. You’ll improve your chance of securing an agent by querying agents who interested in books that match your manuscript.
Do I Need a Literary Agent? Editors at large publishers rely on agents to act as gatekeepers, which is why an author interested in working with a large publisher needs a literary agent. However, authors who self-publish, write short stories or poetry typically do not need an agent.