© Tsiumpa – Fotolia.com
I don’t know about you but I find the whole US royalty situation quite confusing for UK authors. For example Smashwords pays out quarterly via Paypal, Createspace pays out monthly to a UK bank account but Kindle pays out a month in arrears to a UK bank account for your UK earnings but unless you have a US bank account you have to wait till you’ve amassed $100 in US royalties then receive a cheque in US$ via the post.
Now I am lucky enough to have finally hit the magic $100 royalty figure but am I really lucky? I’ve had to wait a long time to accrue that much in US earnings, and now I have received my cheque I have two problems.
- They withheld tax – so a cheque that should have been around $146 came for just over $100 (they don’t tell you it’s $100 after tax you have to accrue by the way). The problem being I have a US tax ID so nothing should have been withheld.
- The cheque is in US$ so I have to now pay to have it converted. Luckily my business account is with HSBC and they accept US$ but the fee for converting is £6.00 and I have to go to the branch as I have to make sure I countersign the cheque exactly in the right place.
Most of my books sell in the UK market at the moment, but that doesn’t stop me wanting to make sure I have a payment solution set up for when they do start to sell in the USA. I did a lot of research and found a prepaid Mastercard that comes with a payment solution which allows me to have a US bank sort code and account number that is accepted by Kindle. This means that as long as I earn a minimum of $10 my US earnings now automatically go on to my prepaid Mastercard.
So how do you get one of these? Visit the Payoneer website (affiliate link).
I signed up on the 5th December and was approved the same day. By the 11th December I had received my first payment from Kindle onto the card less a 1% fee (a partial refund of the withheld tax) and the week before Christmas I actually received the card itself all the way from the States, despite the Christmas post.
I used it online today on an online transaction in US$ and it went through as easily as any other credit card. I can also go to any UK cash machine and withdraw funds as well subject to a fee which I think is around $3.
Remember this is a prepaid card rather than a credit card though so you can’t use it if you don’t have sufficient funds.
The whole process was extremely simple to sign up for. I have an online account where I can view transactions that have occurred and see my current balance at any time, and of course I don’t have to wait for my earnings to accrue and then have the hassle of trying to bank a US$ cheque. The next post brought a cheque for $12 being the balance of the withheld tax, which means I will be lucky to have a £1 left after the £6 fee and the conversion rate! Not to mention the hour and a half of working time I’ll lose making a special trip to the bank so this prepaid card idea is much more convenient for me.
I’d be interested to hear from anyone else who has found the Payoneer service useful.
If you haven’t yet found out how to get your own US Tax ID to avoid withholding tax check out my earlier blog post on the subject.
Update February 2013
Kindle now allow UK authors to receive their US earnings into their UK Bank Account. However, check the settings on your Kindle account as it deleted my US bank account and set me back to Cheque.