Do I need to pay royalty still if I am developing a free game?
No, royalties are only paid if your game makes enough money.
When you are using assets that are not royalty free you will have to pay them in royalties. If you using everything on the UE4 marketstore you will not pay royalties and if your free game is on a different platform. IE google play, ios store etc etc, they’ll take a small percentages of your annual total revenue.