{"id":64103,"date":"21. February 2025 <\/span> Working world","date_gmt":"2025-02-21T10:02:34","guid":{"rendered":"https:\/\/www.teamhero.de\/royalties-advantages-disadvantages-and-calculation\/"},"modified":"2025-08-25T13:56:47","modified_gmt":"2025-08-25T11:56:47","slug":"royalties-advantages-disadvantages-and-calculation","status":"publish","type":"post","link":"https:\/\/www.teamhero.de\/en\/royalties-advantages-disadvantages-and-calculation\/","title":{"rendered":"Royalties: Advantages, disadvantages and calculation"},"content":{"rendered":"

Bonuses are a widespread form of performance-related remuneration, which are mainly used in management positions and in the creative sector. Before they are used, companies should be aware of the legal and tax aspects that need to be considered and the advantages and disadvantages of this remuneration model. <\/span><\/p>\n

This article provides a well-founded and practical explanation of royalties and how they differ from other special remuneration.<\/span><\/p>\n

Definition: What does royalty mean?<\/span><\/h2>\n

A bonus is a performance-related additional remuneration that a company pays to certain employees. Managing directors, board members or senior executives usually benefit from this, but creative professionals such as authors can also receive royalties. <\/span><\/p>\n

The term comes from the French: “Tanti\u00e8me” means “the so much part”. This already makes the most important characteristic of this remuneration clear: it is measured against a fixed quota of a key figure. <\/span><\/p>\n

In contrast to commissions or bonuses, bonuses do not reward individual performance, but rather the overall or departmental success of a company. This also distinguishes them from <\/span>Bonuses<\/span><\/a>which are usually paid independently of economic indicators.<\/span><\/p>\n

Examples of royalties<\/span><\/h3>\n

A classic example is the profit bonus for managing directors. Let’s assume a company achieves an annual profit of one million euros and has stipulated a profit bonus of five percent in the employment contracts. In this case, the additional remuneration for the managing director would amount to \u20ac50,000. <\/span><\/p>\n

Another example can be found in the publishing industry. Authors often receive a contractually agreed share of sales from the books sold. For example, if this amounts to ten percent and the book achieves total sales of \u20ac500,000, this results in a royalty of \u20ac50,000 for the author. <\/span><\/p>\n

Bonuses are also common in start-ups or in the case of company investments. Here, managers often receive a percentage share in the increase in value of the company over a certain period of time. <\/span><\/p>\n

\"An<\/p>\n

How are royalties calculated?<\/span><\/h2>\n

The calculation of a bonus depends on the agreed assessment basis. There are various models, each of which has different economic effects. <\/span><\/p>\n