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A major label deal with a producer will generally include a producer fee ranging from several thousand dollars to much more for a producer with a track record of making hits. The producer would also usually receive a royalty of 3% to 5%, calculated in the same manner as the artist's royalty.
The record royalty to the artist is around 15% to 16% of the sales price of the audio product. The record royalty for a music producer is usually between 3% and 4% of the record's sales price, or 20% to 25% of the artist's royalties.
A Producer Agreement is pretty much what it sounds like! It's a legal contract between a producer and their clients. It sets out the terms and conditions under which a product will create music, film or other creative works for their clients.
This agreement sets forth terms whereby the employer (record company or artist hiring producer) will own both the recording and the rights to the song as a work made. Basically, the producer gives up all rights to the recording and song for a single fee.
Producers typically get anything from 3 to 7 Producer Points. That means that if the artist gets, for example, 20% of the royalties in a record deal and the producer gets 5 points, the producer is getting 25% percent of the artist's share of the royalties.