Since becoming a freelancer, I’ve had countless questions pop up in my inbox about copyright, licensing, and all those legal-ish things that seem a bit fuzzy at first. How exactly does it all work? How do you make proper agreements with clients about how they’re allowed to use your work? And how on earth do you figure out the price of what you’ve created?

Trust me, I’ve been there too. But after doing my homework (read: deep-diving through articles, books, and conversations with fellow creatives), I’ve managed to wrap my head around it — and now I want to help you do the same.

The making fee

Whenever I take on a commission, the first thing I do is calculate how many hours the work will take. This will obviously differ from one illustrator to another — we all work at our own pace — but I can usually estimate the time pretty accurately by now.

Once I know how many hours it’ll take, I just use this little formula:

(hours) x (your hourly rate) = making fee

That hourly rate is always excluding VAT, and so is the making fee that comes out of the equation. But hang on — you’re not quite done yet. There’s one more piece of the puzzle: the licence.

A note before you read further:
I’ve noticed that quite a few fellow illustrators and designers are using the content from this blog on their own websites — and hey, I get it! It’s great that you want to explain things clearly to your clients. But just a friendly reminder: text is also protected by copyright. So if you’re using anything from this blog, please give credit where it’s due. Pop in a link, mention the blog, that sort of thing. It’s a small gesture that goes a long way, especially considering the time and energy I’ve poured into this post. Deal?

Licences

Think of a licence as a usage right. It’s the permission you, as the creator, grant a client to use your work in a specific way. For instance, you might grant a basic licence to allow an illustration to be used on a poster.
But — and this is important — the copyright stays with the maker (you!). Even after an invoice has been paid, the client can’t just run wild and use the work wherever and however they please.

Why do you pay for a license as a client?
Because sometimes, clients go on to make money with the work you’ve created. And while the making fee covers your time and skills, it doesn’t reflect the value of the design once it’s out in the world. If a design is used more frequently or more broadly, it naturally becomes more valuable.

A licence spells out where (medium), for how long (duration), and in what way (nature of use) the work can be used. Those three aspects — plus exclusivity — all help determine the licence fee.
For example, an illustration for a book cover might command a higher licence fee than one used in a school textbook, because the visibility and commercial potential are different. Personally, I don’t charge a licence fee for private commissions like personal portraits, but if that portrait is used on a company website or for branding? Then yes, a licence fee applies. Also, agree on the territory: will it only be used in your country? Europe? Worldwide? With web use, that gets trickier (websites are global, after all), but you can use the website’s language and domain extension to help define it.

The total sum is:
making fee + (making fee x licensing percentage) = total price

Most of the time, I use 20–30% of the making fee as the base for my licence fee — but that’s just a guideline.

Types of licences

There are four main types:

1. Exclusive, limited licence
2. Exclusive, unlimited licence
3. Non-exclusive, limited licence
4. Non-exclusive, unlimited licence

An exclusive licence means the illustration can’t be reused elsewhere by the illustrator during the agreed period.
With a non-exclusive licence, the illustrator can reuse the work for other purposes (unless there’s a conflict of interest).

Limited licences clearly define how the work can be used. If you’re making illustrations for a children’s book, that’s limited use. If the client wants to turn them into merchandise (mugs, plushies, etc.), you can include that too — and it’s still a limited licence, just more expansive.

Unlimited licences allow clients to use the illustration for anything and everything, without coming back to you for new permissions. You’re giving them free rein — and naturally, that comes with a higher price tag.

What needs to be in a licence?

A well-structured licence should cover:

• Medium (e.g. title of book or magazine)
• Duration (e.g. first 1,500 copies or three years online)
• Territory (e.g. only in the Netherlands and Belgium, or worldwide)
• Exclusive or non-exclusive
• Limited or unlimited use

Putting It in Writing
There’s no official rule that says a licence must be written down, but seriously — always do it. Whether it’s in your contract, quote, or invoice, having things in black and white saves a lot of hassle later on.

You can add the licence terms as a paragraph in your quote or include it as a separate PDF attachment (just be sure to reference it clearly in the main document). When your quote is accepted, that means your client agrees to the licence too.

One-Time Use
If the illustration will only be used once (say, in one issue of a magazine), you can include the licence fee in your overall price. Just make sure the quote and invoice clearly specify the where and what — for example, “One-time publication in [Magazine Name], Issue [Number].”

Breaking it down: Making fee vs Licence

It’s good practice to split your fee into two parts:

• 70%: making fee
• 30%: licence fee

If your work is misused later, you’ve got a paper trail that clearly shows your usage terms — which can be helpful in legal situations.

Additional licences

Say a client originally commissions you for a poster, but later wants to use it on their website too. That’s where an additional licence comes in. In most cases, you can charge around 30% of the original making fee. If the illustration adds commercial value, the creator deserves fair compensation too.

Unlimited licences, buy-outs & transferring copyrights

Sometimes, a client wants to use the illustration widely and indefinitely. Start by offering an unlimited licence — where you retain copyright, but they don’t need to come back for additional uses. This is sometimes referred to as a “buy-out”.

Important: make sure the language is super clear. Some clients assume a buy-out means they own your work. Spoiler: they don’t — not unless you transfer your copyright.

Pricing for unlimited use? That’s typically 50%–200% of the making fee, depending on how broadly the work will be used. The more value the client gains, the higher your percentage should be.

To calculate a fee for an unlimited licence, you can use the following formula:

Fee for unlimited licence:
making fee + (making fee x unlimited usage percentage) = total fee

Royalties

Let’s say you illustrate something for a product — a mug, tote bag, stationery line, or a book. Instead of (or alongside) a fixed fee, you might set up a royalty agreement: a percentage per item sold, based on the wholesale, production, or retail price.
This way, you share in both the potential success and the risk of the project. Often, this is paired with an advance (a non-refundable upfront payment).
For something like a picture book, royalty percentages typically range between 5% and 10% per sold copy.

The grand total

So, what does a client actually pay?

Making fee + Licence fee = Total amount (excluding VAT)

Be clear in your quote. Specify the licence (medium, duration, and scope) and your timeline for delivery. Transparency helps everyone.

One more thing: Terms and conditions

Always include your terms and conditions with every quote and invoice. It protects you and your work.

Please note: I’m not a lawyer and I don’t have formal legal training. I’m an illustrator who’s done a lot of reading and research into copyright and licensing. If you have any additions, or spot something that’s not quite right, I’d genuinely appreciate you letting me know. Also, this blog can’t be used as legal evidence in court.