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Royalty Payment Calculator

Work out royalty payment instantly with clear inputs, formula shown and shareable results.

About Royalty Payment Calculator

Royalty agreements usually combine a percentage of net sales with a minimum guarantee and a recoupable advance. The licensee pays the higher of earned royalty and the guarantee, then offsets any advance already paid, so the cash due can be nil while royalty is still accruing.

Formulas

Earned royalty

Earned = Net sales x Royalty rate %

Payable

Payable = max(Earned, Minimum guarantee) - Recoupable advance, floored at zero

Worked example

With the default values below, Royalty Payment Calculator returns Royalty payable now of $80,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net sales in the period
2,400,000
Royalty rate on net sales
6
Minimum guaranteed royalty for the period
180,000
Advance already paid and recoupable
100,000

Results

Royalty payable now
$80,000.00
Royalty earned on sales
$144,000.00
Top-up to reach the minimum guarantee
$36,000.00
Advance still to be recouped
$0.00

Step by step

  1. 1Values used
  2. 2Earned royalty
  3. 3Payable
  4. 4Royalty payable now= 80,000.00
  5. 5Royalty earned on sales= 144,000.00
  6. 6Top-up to reach the minimum guarantee= 36,000.00
  7. 7Advance still to be recouped= 0.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Indicative calculation. Actual entitlements depend on the licence wording, the definition of net sales, territory carve-outs and withholding tax. Not legal advice.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative calculation. Actual entitlements depend on the licence wording, the definition of net sales, territory carve-outs and withholding tax. Not legal advice.

Frequently Asked Questions

What counts as net sales?

Gross invoiced value less returns, trade discounts and, usually, freight and sales taxes. The definition is the most disputed clause in most licences.

Is an unrecouped advance refundable?

Almost never. Advances are typically non-refundable but recoupable against future royalties.

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Royalty Payment Calculator – Calculate Royalty payable now