How do university professors earn money external to their salary from the institutions where they teach?

As far as I understand:

  1. Obtaining funding from government/companies for doing research.
  2. Forming their own consultancy firms or doing freelance consultancy for external entities.

Am I correct?

What other viable sources do they have for earning money?

  • 18
    At least in Europe, I believe the answer is: The vast majority doesn't in any non-negliable way.
    – Arno
    Aug 9, 2021 at 21:28
  • 6
    The question in section (1) makes it sound like professors get grant money and then dole some of it out. At least in the US, institutions get grant money directly, on behalf of professors, and then use that money to pay part of the professor's salary. The professor doesn't keep any other portion of the money personally, just their salary. Some positions are paid on a "9 month" basis and grants may allow for a full "12 month" salary, but that's it.
    – Bryan Krause
    Aug 9, 2021 at 22:02
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    I'm with @DanRomik on this one. If I put into an NSF grant one summer month of salary for myself and 12 months of funding for a graduate student, then the student still gets substantially more than I do. It's not like I can choose how much of it I give to myself and how much to the student. The statement is just insulting. Aug 10, 2021 at 0:44
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    @nick012000 I'll describe how this works for National Science Foundation grants in the U.S., because that's what I'm familiar with. The allocation of grant money is specified by the budget that is part of the grant proposal. That budget must be approved first by the university administration before the proposal can be submitted. Then the NSF can fund the grant as proposed, can reject it, or can partially fund it. In the last case, it gives guidelines for how the budget is to be adjusted, and ultimately the new, reduced budget must be approved by the university and the NSF. Aug 10, 2021 at 3:33
  • 3
    (Continuation of previous comment:) Any later changes in the budget require NSF approval, but for some minor changes the NSF delegates that authority to university administrators. As far as I know, increasing the budget line for the PI's salary is the most difficult (usually impossible) change to get approved. Aug 10, 2021 at 3:36

7 Answers 7


I feel a lot of the existing answers are rather US-based. Here is my experience in Europe:

  • External work - my university allows external employment for up to 20% on top of my university duties. Some people have small appointments at companies, some do some teaching at other universities, some run their own small company (often offering consultancy services), but most do not use this 20% at all (since 20% more work on top of an already demanding university job tends to not leave a lot of time for family and hobbies).
  • Monetizing your research - more of a theoretical option for most people, but in principle my university claims no IPR (intellectual property rights) for any research we do. Hence, you are free to, for instance, patent some of your work and licence it to companies. In my field (computer science) this is exceedingly rare (I know nobody who has generated noteworthy money that way), but in other fields this may be a realistic option.
  • Paid service - there are some "academic services" for which you get compensated. Examples include reviewing for some grants or serving on external PhD or appointment committees. That said, the amount of money you are going to get this way will likely be at best a small bonus, not a real "income stream".
  • Administrative posts - some higher academic posts (say, department head and upwards) come with an increased salary while you are serving. However, you should not expect getting rich this way either, it's normally a rather small bonus to your standard salary, nothing that will substantially change your life situation.

Notably, since we have 100% contracts the notion of paying yourself from your own grants does not exist. There may or may not be schemes to siphon off money from grants into your own pockets, but these are either downright illegal or at least heavily frowned upon.

All in all, for most people the salary that they get from university is the money they make, with the equivalent of a few hundred USD per year in bonus income from routine external service. Exceptions exist, but these people do something unusual in addition to standard academic work (such as running a successful company on the side).

  • Some universities allow you to start a start up unrelated to your research.. You can be working towArds your start up in your free time (as long as you disclose any potential conflict of interest) mostly they can’t force you to work beyond office hours and you can use that time.. but typical workloads don’t leave much time..I have seen faculty from business school having stake in Angel investing firms..
    – Anuj
    Jun 23, 2023 at 0:14

At US universities most tenure-track positions are nominally 9 or 10 months, and allow faculty to do certain other work in the summer. In addition to summer research salary paid by grants, some other common sources of summer salary are teaching classes in the summer, organizing summer schools or REUs or similar events, or some kind of summer consulting for industry or government.

  • I think most universities allow faculty to do other work during the academic year as well.
    – Kimball
    Aug 9, 2021 at 23:08
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    Sort of, the rules are much more strict during those 10 months, Eg here’s my university rules: academicaffairs.iupui.edu/Faculty-Affairs/… Aug 10, 2021 at 1:33
  • "and allow faculty to do certain other work in the summer" is a very positive way to express that they are not paid in the summer and must find alternative income
    – JenB
    Aug 10, 2021 at 10:27
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    US 10-month faculty salaries are pay more in a year than 12-month salaries in other countries, and you’re allowed to take in 12 payments instead of 10, so it really is just an accounting fiction that allows for more flexible summer options. A US school wouldn’t dream of saying “we won’t match that offer because that’s a 12-month salary and we’re only paying you for 10-months.” Aug 10, 2021 at 13:49
  1. Obtaining funding from government/companies for doing research.

This would not usually give the researcher more money, except in the long-term indirect sense of advancing their academic career and helping to get a promotion. Research grants are paid to the university employing the researcher and they will generally pay some or all of the salary of the researcher. The academic does not get money directly from this --- instead, the university takes the money and uses it to subsidise the salary costs of the researchers on the grant. (There are some exceptions to this, such as direct summer salaries in the US.)

Of course, if a researcher wins a major grant, this can be used to make a case for promotion from the university, and it can therefore lead to an indirect wage raise for the academic in question. For a researcher who is not already a full professor, winning a major research grant will usually lead to a promotion and consequent pay raise, though the pay raise is modest relative to the amount of the grant.

  1. Forming their own consultancy firms or doing freelance consultancy for external entities.

Many academics have strong technical expertise in areas that are useful to external entities, and some make money from external consulting work. Universities sometimes even allow academics to engage in external consulting work as a portion of their work time, which means that some academics can make money from consulting work within their ordinary academic hours.

Though I do not have data on this kind of work, my observation is that only a small proportion of academics do external consulting work outside their regular academic job. Even for those that do this, the income is highly skewed --- most academics who do external consulting earn a modest amount of money from this (substantially less than their academic salary) but a few make big money. In my observation the latter are mostly academics who work in economics/finance and moonlight working for big finance companies, or engineers doing work for big-name industrial firms.

What other viable sources do they have for earning money?

Other avenues relating to academic work are writing textbooks or popular books, creating blogs/websites/YouTube channels, etc. Again, only a relatively small number of academics earn any serious money doing this, but a few manage to make big money. Beyond these items, academics can of course apply for second jobs just like anyone else, but this is rare, since academic work tends to bleed into weekends and holidays already.

  • 3
    So in summary, the vast majority of university professors do not earn money beyond their salary (in nontrivial amounts).
    – quarague
    Aug 10, 2021 at 7:37
  • Yes, that is correct.
    – Ben
    Aug 10, 2021 at 8:22
  • 1
    In the US, most external grants can pay 2 or 3 months summer salary, so this can be a 20% to 33% increase in income.
    – Dawn
    Jun 22, 2023 at 1:44

The standard sources I know about from rather direct knowledge:

  1. summer income from a grant
  2. royalties from writing an advanced monograph
  3. Teaching a class beyond one's teaching load
  4. Short-term work for certain government agencies
  5. Taking on an administrative role for a few years
  6. Writing a review of a textbook

I should point out that the royalties thing does not work that well anymore for reasons you can find on Google. Also (1) and (3) and (5) may not be possible in many locations. In particular, (1) seems to be mainly a US thing.

  • 1
    As a sidenote, all of these may or may not lead to "extra income". For example, my university only grants extra pay for rather advanced administrative roles, and extra teaching will basically never be paid. And if you are on a 12-month contract (as far as I know the standard almost everywhere except in the US?), "summer income" isn't really a thing.
    – xLeitix
    Aug 11, 2021 at 8:05
  • Yes, all of none of 1,3 and 5 are available in the UK, and being paid for 4 would be highly unusual. I've also never heard of people being paid for 6 (but then I don't know many people who have reviewed many textbooks) Aug 11, 2021 at 12:00
  • I also feel like 1. isn't really what the OP is asking about. They are asking how academics can earn money beyond their salary. 1 isn't beyond the salary, its just necessary to keep the same salary going over the summer. Aug 11, 2021 at 12:02

A select few university professors make big bucks from the royalties on a basic widely-used textbook.

Note I said "select few". Most academic textbooks make only minuscule amounts in royalties.

  • 3
    The most common source of textbook riches are, I think, First Year Calculus and also Economics. This is due to the large number of students taking such courses. I've known a few people who have earned $millions from textbooks.
    – Buffy
    Aug 9, 2021 at 22:26
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    Calculus, James Stewart. Rank: #13 in Amazon Best Sellers > Books > Textbooks > Science and Mathematics.
    – GEdgar
    Aug 10, 2021 at 0:33
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    @Buffy If you personally know a few people who earned millions from textbooks than you know a significant proportion of all people who earned millions from textbooks. I would guess the global total is a 2-digit number.
    – quarague
    Aug 10, 2021 at 7:39

Some of these answers are only half true. These days, university faculty have to look to more than the university for their revenue stream. Its true that a faculty member can have a grant subsidize your teaching, which means that you aren't teaching and can spend all your time on research, which furthers your career, your reputation, your promotion or your next book. However, I have received grants where I received no time off from teaching and have instead received as much as 20-25% extra salary, which when making over a six figure salary is no small chunk of change. For some academics, book sales can also be quite enriching--think of Ibram Kendi's How to Be an Antiracist or Stamped from the Beginning. If you write for a more popular audience, and then pursue multi media around your book project, you can make a decent revenue stream. Even if it is just an academic book, I net about $1,500 a year from my latest book and have done so for the past five years. Then, many academics command speaking fees--$2,000-$5,000 for someone of note, and $10-25 K for someone with really big national standing. And that's for every single talk. Other academics I know have established lucrative consulting firms, and I have seen some do quite well, from economic policy firms to historians advising Hollywood on historical films. My university has no rule on how much one may make on a separate consulting firm. All in all, the days of academics quietly sitting in their office contemplating deep thoughts over theoretical works is largely done and over with. The public largesse has largely abandoned academia and academics, and we have to fend for ourselves. Many academics at top institutions have come to understand that the university is only part of their salary base. The neoliberal university has adopted the business model, and so have a lot of academics.


In addition to what has been stated above (No, you don't get income from government/company grants, yes a few get a modest amount from consulting, you can earn some royalties from books), it may be possible to earn something from patents. Rules vary from university to university, but at my institution licencing income from patents is shared between the named inventors and the university. Again, it is very rare to earn substantial amounts this way, but I do know of one academic who has earned tens of millions from a patent they took out while working for the university. The only other academic I know with a patent earns only a nominal amount from it though.

  • 1
    Many of us get some income from a government grant. Perhaps you can qualify this by country? Aug 11, 2021 at 4:05
  • This is the UK. But is it really the case anywhere that money goes directly from the government into the pocket of the academic without going via the university? My grants support my salary, but they don't enhance it. I don't get a higher salary if I get more grants (other than being more likely to get promotion). Aug 11, 2021 at 11:57
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    It does not go directly. It flows from the government to the university and sometimes into a bit of extra salary. There is friction in the form of overhead and other things, but indeed one can increase one's salary from a government grant, in the US. Aug 12, 2021 at 3:58
  • 1
    @IanSudbery: My appointment (as with, I believe, most US tenure-line appointments) gives me a salary of $X per year, which is accounted for as $X/9 per month for 9 months, and 0/month for 3 months. If I bring in a government or corporate grant, part of that budget can be used to pay myself at the same per-month rate as my primary appointment, meaning that I can raise my salary up to a threshold of $4X/3 via such grants.
    – RLH
    Jun 22, 2023 at 15:36

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