Making Money on YouTube
29th July 2018
If you're looking for an easy way to score some quick, dependable cash... well, this probably isn't it. For every incomprehensibly massive YouTube success story, there are thousands of other would-be superstars who struggle to find even a handful of subscribers.Top earners in the game are raking in literally millions, but they've worked hard to get there and they've had more than a little luck along the way. Maybe you're the same. After all, you've got a face and a camera to point at it. Why shouldn't you make a success of your YouTube channel? More to the point, where's all that money actually coming from in the first place?
How do people earn money from ads on YouTube?
When most people talk about YouTube cash, they usually mean advertising revenue. If you've got a channel with a large enough audience and regular, high-quality uploads, Google starts paying attention. They love success stories and they're excited to be part of them – not least because they scrape off 45% of the revenue. Here's how it works:
- You apply to be a YouTube Partner, meaning your channel can carry adverts. You can do this in the YouTube Creator Studio part of your page.
- You set up an AdSense account, which is how you'll get your money.
- You do everything you can to stay on Google's good side so your content stays monetised.
That last part can be a bit of a challenge. More and more creators are finding themselves cut out of the advertising loop after straying into the wrong areas. Anything from vulgar language to contentious political coverage can get you demonetised in a hurry.
Stick to safer topics and tones and you're more likely to stay eligible for advert revenue. Be realistic in your expectations, though. Top channels can make millions of pounds over the years, but we're talking about people who've scored literally billions of views to earn that. Even channels with hundreds of thousands of subscribers are often still only seeing a pound or so per thousand views they get.
Can you make YouTube money without ads on your channel?
Of course, AdSense isn't the only game in town when it comes to making YouTube money. Popular creators are selling merchandise, making public appearances and using crowdfunding platforms to bring in the cash. Some make deals directly with brands to become “influencers”, basically spreading the word about certain products to their legions of fans.
Others licence their videos out to other media. YouTube itself even has a Fan Funding option that lets subscribers support you directly through a virtual “tip jar”.
Patreon, on the other hand, is a crowdfunding platform where people can pledge cash for each piece of content you create, or simply throw you a quid or so each month.
The point is not to put all your revenue eggs in any one basket. The more ways you have of turning your channel into money, the more reliable that money is likely to be.
Now for what you'll actually be doing to earn that revenue. Obviously, the content you put up is entirely up to you. Beyond that, the YouTube game's all about pulling people back to your videos. You're building a following and forging lasting relationships. That means putting up regular content and keeping the quality high.
Will it cost me anything to start earning money on YouTube?
As your channel grows, you'll probably find yourself learning a few essential tricks. Eye-catching thumbnails and “clickbait” titles might help to pull in the viewers, for example. The thing is, you've got to have something worth watching once they're there – and worth coming back for after.
If you do well enough, you'll find yourself outgrowing your original set-up. Pretty soon you'll want to start making some essential investments. Your phone's camera will only get you so far, after all. Possible key investments include:
- Better camera equipment, tripods and microphones.
- Video and audio editing software to ramp up your technical quality.
- Dedicated studio space and specialised equipment like video capture devices and green screens.
- Learning new skills, from analysing and growing your fanbase to managing your accounts.
- Specialised staff to deal with the technical stuff you can't, or just to free up your time for recording.
Does earning money on YouTube count as a job?
If all that's starting to sound like running a business, then you're catching on. You caught Google's attention when you started to build a following. You'll catch the taxman's the moment any real money money starts pooling up. If the amounts are still pretty small (under £1,000 a year), you'll probably not have too much trouble from HMRC. You can't count on that, though – particularly since your income isn't fixed.
Do I have to pay tax on YouTube earnings?
Even if you're paying tax through PAYE (your employer takes out your tax and National Insurance before you get your wages) for another job, you still need to declare any other income you get. That means filing Self Assessment tax returns and keeping track of your YouTube business spending. Many of those essential costs can count as allowable expenses, meaning they bring down the amount of tax you owe. This is a massive topic in itself, and it really is worth talking to an expert to make sure you're making the most of your money.
At the end of the day, there's definitely cash to be made on YouTube, whether through basic advertising or a combination of other methods. When your channel starts to take off, get in touch with RIFT. We can take care of your tax rebates and tax returns, protect your money and keep you on the right side of the taxman. Just call or email to see how we can help.