In a little over a decade, YouTube has gone from an interesting online video platform that is fun but ultimately frivolous, to a legitimate career path that surprisingly attainable for almost everyone.
This may feel a bit “icky” to some—YouTube was originally this fun young thing that some people were lucky enough to succeed financially at, but now it’s a mature, grown-up platform with people of all ages eeking out a living, often making content that is far from exciting or creative.
That, unfortunately, is the reality of any career. And, with any career choice, there are a lot of mundane questions to answer. Things like “what is your earning potential”, “how reliable is this career”, and, as the title of this post asks, “how do YouTubers receive their money?”
The how of getting paid on YouTube is one of those small questions that may seem insignificant at first but can be quite important for reasons we’ll get into shortly. The quick and straightforward answer to “how do YouTubers receive their money” is through Google Adsense, who pay either directly into your bank by deposit or via a cheque in the mail.
However, as with most simplified answers, this doesn’t paint the full picture. For example, there are multiple common ways for YouTubers to get paid besides AdSense and a variety of different ways to get paid by those other methods.
Don’t worry; we’re going to go over the most common ways that YouTuber’s get paid for their content; all you need to do is keep reading!
How Do YouTubers Make Their Money?
Before you can understand how the money is received, it is important to understand where the money is coming from.
On the Internet in this day and age, there is a seemingly limitless selection of ways to leverage an audience into financial gain, both directly and indirectly.
That being said, the many years of YouTube success across thousands and thousands of YouTubers have allowed a few different methods to rise to the top of the pile in terms of convenience, effectiveness, and popularity.
YouTube Partner Programme/Google AdSense
Let’s start with the obvious. When we gave our simplified answer to the question of “how do YouTubers receiver their money” above, this was the method we were talking about. This is the built-in monetisation option that you can choose to enable when your channel has met the necessary criteria. That criteria include;
- Have at least 1,000 subscribers
- Have at least 4,000 hours of watch time over the last twelve months
- Meet YouTube’s various policies for spam and community guidelines
- Have an AdSense account
When you are part of the YouTube Partner Programme—and on eligible videos—YouTube will show advertisements that can earn you money. The exact amount earned per video depends on how many ads are served and what your viewer’s behaviour is in relation to those ads. For example, do they watch the whole ad, or do they skip it as soon as they get a chance?
These ads are actually served by Google’s AdSense platform, and any payments are handled through there. That is why you need to have a Google AdSense account before you can join the YouTube Partner Programme. Adsense supports a few different payment methods including;
- Electronic Funds Transfer (EFT)
- Bank Transfer
You might have noticed the conspicuous absence of PayPal in that list. PayPal may be the largest and most popular online payment processor, but it is not an option for Google’s AdSense.
Membership platforms allow your subscribers to commit to a small monthly sum to support your content. The incentive usually being that having a more reliable source of revenue compared to YouTube’s standard monetisation system will allow you to put more time into your channel, and thus create better or more content. Of course, there doesn’t always have to be an incentive—sometimes people just want to support their favourite creators.
YouTube offer their own membership option for channels with 30,000 subscribers or more, but the payment is handled the same way as their ad-based revenue. However, another option is to look outside of YouTube for a third party membership platform.
The most popular example of this is Patreon, a platform that allows you to set different tiers of supporters and offer unique perks to each of those tiers. Unlike AdSense, who do not support PayPal as a payment method, Patreon allows PayPal as well as fellow online payment processors, Payoneer and Stripe. Another example of this kind of service is Ko-Fi, which allows you to get paid through either PayPal or Stripe.
Another way to get paid from your YouTube channel is through the sale of merchandise. There are a plethora of services around that can facilitate this, including YouTube’s own inhouse solution for channels with 10,000 subscribers or more. There are dozens, perhaps hundreds of alternatives, however. As a general rule, you can expect to find PayPal and cheque payments as an option for getting your money.
It is also possible to receive direct donations from your viewers. How you receive this will depend entirely on your own preferences regarding the services you use. For example, PayPal allows you to set up a donation page for this very reason. Ko-Fi is essentially designed for small, one-off payments (the platform is built around the idea of your audience buying you a cup of coffee).
We strongly advise against just giving your bank details out, of course.
Brand Deals and Promoted Content
This monetisation option involves directly dealing with an advertiser. In this case, we can’t offer much insight into what would be involved since every deal will be different. Indeed, you could even request a particular method of payment as part of your deal.
Why is the Way YouTubers Receive Their Money Important?
If you are just YouTubing for fun and you are not concerned with earning money from it, it doesn’t really matter how YouTubers get paid. But for people who are interested in the earnings they could be receiving, and certainly for YouTubers who are looking to make their YouTube journey a career move, it is essential information.
For one thing, the part of the world you are in could determine whether or not you can earn money from YouTube directly. At the time of writing, AdSense is not available to people in the following countries;
- North Korea
It is also not available to individuals or businesses that are restricted by trade sanctions or export compliance laws. Granted, there probably aren’t a huge number of people who meet any of the above criteria that are looking to start a YouTube career, but it pays to know these things. The regions that AdSense is not available in are not set in stone, for example. Shifting political situations could see countries being removed from that list, or added to it.
The same reasoning applies to payment processors. For example, if you were unable or unwilling to use PayPal or Stripe, you would not be able to get your money out of Ko-Fi.
These are all things to factor in if you intend to make YouTube into a career move, but not necessarily something you should be concerned about when you are first starting out. After all, if you make it big on YouTube, but circumstances conspire to keep you from getting paid, you could always migrate to another platform. It wouldn’t be easy, but it would be doable. And there are always other ways to monetise your channel.
Monetising Your Channel: Diversity is Key
YouTube goes to great lengths to make their platform financially viable. And, even though it doesn’t always feel like it, part of that viability is making YouTubers money, since YouTubers who are earning a decent amount of money for their efforts are more likely to continue putting that effort into the platform. Even when YouTube makes significant changes that seem to harm YouTuber earning potential, it is because they are trying to make the platform as appealing as possible advertisers.
Whether the changes they make are always effective or worth the grievances they cause is a different issue, but the motive behind them is clear enough.
Unfortunately, the ever-changing landscape of YouTube monetisation, combined with the whims of advertisers and shifting trends, makes the YouTube Partner Programme a somewhat unreliable source of income. In fact, not only is it unreliable, it is typically not a great earner for many types of video. YouTube revenue is mostly measured in CPM, which is essentially an amount you earn per thousand views you get. The actual figure is all over the place due to how large a factor viewer engagement plays—a video with a lot of views but where most viewers skipped their ads might earn less than a channel with a fraction of the views, but most viewers watched the ads—but as a rough average, you can expect around $1.50 to $2 per one thousand views.
Assuming you are making $2 for every thousand views you get, you would have to be getting an average of over seventeen thousand views a day to earn enough money to be considered above the poverty line in the United States. That’s a lot of views. It’s not an unachievable goal, of course, but it’s no small feat to reach an average number of views a day that is measured in tens of thousands. It’s also worth mentioning that most people don’t strive to be just above the poverty line. To bring your YouTube revenue up to something more in line with the average income in the United States, you would be looking at around forty thousand views a day.
If you can build up a dedicated enough audience, direct contributions such as PayPal donations, or memberships such as through Patreon or YouTube’s own membership option are a great way to build a solid, reliable revenue stream from your YouTube channel.
Merchandise is also an option but should be considered a secondary option rather than your primary source of revenue. While you can realistically build a large base of people willing to contribute a few dollars here and there to support you, it is far less likely that you will be able to sell T-shirts or mugs with the same consistency, and in large enough numbers. Unless you are a fashion company, merchandise should be considered a side gig.
Brand deals are a little trickier as they typically require a brand to come to you. Pitching ideas to companies is not unheard of, but it is far more common for the company to go to the YouTuber. Sponsored videos and brand deals are by far the most lucrative of the many ways to get paid for your YouTube channel, though the exact amount you can earn will depend on your channel’s content and following.
Final Thought: Tax
There is a multitude of ways to earn money from your YouTube channel, but not quite as many ways to receive that money. The one absolute factor is that you will need a bank account. Whether you receive your money directly from Google AdSense, via a payment processor, or even via a physical cheque mailed to your home, you will need a bank account for the money to go into. The upshot of this fact is that your earnings will always be traceable, and as such, entirely discoverable by any governmental agency that might want to look into your finances.
Neither YouTube, Google, nor any of the payment processors mentioned handle taxes; that is all on you. Of course, tax law is different from region to region, and country to country. If you are not familiar with the law on taxes where you are, you should do some research to avoid getting a nasty surprise when tax collectors start knocking on your door.
In truth, the amount of money received by most YouTuber’s will not be enough to even register on a government’s tax-collecting radar, but that is not a risk we recommend taking. If you should be paying tax on your YouTube earnings, it’s better just to pay them and stay out of trouble!