Royalty invoice template
Royalty invoice template for licensors: bill a percentage of the licensee’s reported net sales, any shortfall against the agreed minimum and extra licence fees.
Templates by industry
- Royalty 8% on net sales, first half-year
- Minimum guarantee shortfall for the period
- Licence fee for the added territory
Preparation guide
Example workflow
Confirm scope and quantities
Example: reconcile the approval and work record for "Royalty 8% on net sales, first half-year" to establish the quantity for this invoice.
Record delivery and acceptance
Check completion for every line, including "Licence fee for the added territory". Hand over approved versions and a file manifest, confirming usage scope and completed revisions.
Send the billing record
Send the final charges, delivery reference and due date to the customer, then reconcile payment against the invoice number.
Royalties turn someone else’s sales into income for the owner of a design, a book, a character or a brand. The licensee reports what it sold; the licensor invoices the agreed percentage. Most licence agreements add a minimum guarantee, so a weak season still pays a floor, and charge separately when new products or territories are added. This template follows that structure line by line, with the reporting period named on each line.
Fields to prepare
- Deliverables and line items
- Royalty 8% on net sales, first half-year, Minimum guarantee shortfall for the period, Licence fee for the added territory: record the quantities actually supplied and the service period.
- Royalty 8% on net sales, first half-year
- Take net sales from the licensee’s signed report and say how returns and discounts were treated, as the agreement defines them.
- Minimum guarantee shortfall for the period
- If the royalty falls below the guaranteed minimum, bill the difference here rather than raising the royalty line.
- Licence fee for the added territory
- A new territory or product category usually needs a contract amendment; quote its date with the fee.
- Quantity and output format
- Record pages, images, word counts or running time, final file formats and whether editable source files are included.
- Review and usage scope
- Specify the draft approver, revision rounds, intended media and duration, and who supplies third-party assets.
- Scope to agree
- Work the royalty out from the licensee’s sales report for the period, state the rate and the net sales figure, and show any minimum guarantee shortfall on its own line.
Before sending
- Does “Royalty 8% on net sales, first half-year” show the quantity actually supplied, not the quantity first quoted?
- Is “Minimum guarantee shortfall for the period” charged at the rate the customer agreed to, with any change approved?
- Is “Licence fee for the added territory” finished and accepted, or does it belong on a later invoice?
Show 3 more
- Agree when a change of direction after draft approval becomes additional work.
- Check separately whether editable sources and final delivery files are included.
- Match completed work to the order or approval record, and confirm the payment due date and amounts already received.
Worked example with sample figures
The figures below are invented to show how the template adds up: 3 lines in USD, with an example tax rate of 8%.
| Item | Quantity × unit price | Amount |
|---|---|---|
| Royalty 8% on net sales, first half-year | 1 × $2,200.00 | $2,200.00 |
| Minimum guarantee shortfall for the period | 1 × $300.00 | $300.00 |
| Licence fee for the added territory | 1 × $750.00 | $750.00 |
| Subtotal | $3,250.00 | |
| Sales tax (8%) | $260.00 | |
| Total | $3,510.00 | |
Net amount $3,250.00, sales tax $260.00, total payable $3,510.00.
What the document must show
The details an invoice has to show, and why each one matters, are set out in the guide below.
The sales tax depends on where the work is supplied, so set the rate that applies to your customer before sending.
Official rate reference: US government: state and local taxes
Full requirements: How to write an invoice: a step-by-step example
Frequently asked questions
What if the licensee’s sales report looks wrong?
Invoice what the report shows, then raise the question in writing. Most licence agreements give the licensor a right to audit the licensee’s records, and any difference found is invoiced or credited separately.
Will the licensee deduct tax from a royalty payment?
Royalties paid across borders are often subject to withholding tax in the payer’s country, sometimes reduced by a tax treaty. Ask your adviser what applies and which certificate the licensee needs from you before the payment date.
How is the sales tax worked out on this invoice?
The worked example above uses an example rate of 8%: $260.00 on a net amount of $3,250.00, for a total of $3,510.00. The editor recalculates all three when you change a quantity, a price or the country.
How should I number invoices?
Use one unbroken sequence per business, never reuse a number, and issue a credit note rather than deleting an invoice you have already sent.
Can I email it to the customer?
Yes, from your own mail app. With a free account, the editor’s download menu offers Email this document, which opens your mail app with a message about the document already written. QuoteBill sends nothing itself, so save the PDF and attach it before you send.
Read next
Reading for the Royalty invoice template: How to write an invoice: a step-by-step example and Credit note vs invoice (and credit memo): how to issue one. The VAT and GST calculator works out the tax line for you.