Tes Fees, Royalties and VAT Explained - A Guest Post

Tes Fees, Royalties and VAT Explained - A Guest Post

Today we have a special post from Tes Author Ben, whose store Rocket Sheets on Tes has products for teachers as well as teacher authors. 


Today Ben is going to be explaining a bit more about how tes works. 

Tes Fees, Royalties and VAT Explained


Have you ever looked at your transaction details on TES and wondered why you only earned 30p from a £1 resource sale even though your author royalty rate is 60% (or higher)? The reason for this boils down to VAT and transaction fees.


Each transaction may have VAT depending on which country your customer bought your resource from. For UK customers, £1 VAT is charged for every £6 of the resource purchase price which is equal to about 16.67%.

When a customer buys a resource that costs less than £3 ($3), Tes will also charge a transaction fee of 20p (20c) after VAT and royalty rates have been applied. However, the decision to charge a transaction fee is based on the purchase price, not the original price so if your customer bought a resource during a 20% off sale for £2.80 that usually costs £3.50 then a 20p transaction fee will still be charged.

Your author royalty and the Tes royalty are the final amounts of money that you and Tes each get from the transaction. They both depend on the VAT, your author royalty level/rate and whether or not a transaction fee was charged. Your author royalty is basically your actual earnings and once you have over £10 in author royalties you can withdraw this money to your bank account.

Your author royalty level/rate depends on the total net sales that you made in the last 12 months. Every author starts off as a bronze author with a 60% royalty rate. If you generated £1000 or more (but less than £6000) in total sales value in the last 12 months, then you will become a silver author with a rate of 70%. If you generated £6000 or more in the last 12 months you will become a gold author with a royalty rate of 80%. It’s important to remember that the royalty rate is applied to the sales price after VAT has been charged and you might also have to pay a transaction fee after your royalty rate has been applied.

Let’s say that a UK customer buys one of your resources that costs £1. The VAT is calculated first based on the purchase price and in this case, 17p (about 16.67%) will go towards the VAT. This leaves 83p which is split between you and Tes based on your author royalty rate. Let’s say you are a bronze author meaning you have a 60% royalty rate. In this transaction, 50p (60% of £0.83) will go to you and 33p (40% of £0.83) will go to Tes. However, since the purchase price was less than £3, Tes will also charge a 20p transaction fee leaving you with a final author royalty of 30p (50p – 20p) and leaving Tes with a royalty of 53p (33p + 20p).


There are a few ways to increase your average author royalty from each transaction. For example, you could grow your store to become a silver or gold author (increasing your royalty rate) or you could bundle your resources together so that the combined cost is over £3 (avoiding the transaction fee). A great way to see how much you’ve been spending on transaction fees is by using the TES Author Data Tool by Rocket Sheets. It’s free and it gives you a breakdown of the VAT, Author/Tes royalties and transaction fees for each day, month, or year as well as an average for the last 12 months.

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