Royalty Calculator

About this calculator

A royalty is a payment owed to the owner of an asset — a patent, a book manuscript, a piece of music, a trademark, a mineral right — calculated as a share of the revenue or units generated by whoever is licensed to use it. The basic formula is royalty = net sales × royalty rate, though many contracts instead specify a fixed per-unit royalty (e.g. a flat amount per book sold or per barrel extracted) rather than a percentage of revenue.

Authors and publishers, musicians and record labels, franchisors and franchisees, and patent holders and licensees all rely on royalty math to settle what’s owed each payment period, because licensing agreements almost never pay a flat fee — they’re structured so the rights holder’s income scales with how well the licensed product actually sells. Getting the base right (gross sales vs. net sales after returns and discounts) and applying the correct rate is what keeps royalty statements accurate and disputes to a minimum.

This calculator takes your sales figure and royalty rate (or per-unit royalty) and returns exactly how much is owed, so you can check a royalty statement or estimate income from a licensing deal.