Influencers are all over the place these days. They aren’t your usual celebrities, but they’re the ones who have made a bang on social media and other digital platforms. Influencers are people who have established a loyal following that allows them to earn from doing exactly what they want to do. Moreover, growing technology has given them even more avenues to profit, making “influencing” quite a lucrative prospect for many people.
If you’re interested in entering this line of work. Here are some ways you can expect to make money:
As more and more people find it enjoyable and valuable to listen to podcasts, many influencers are jumping on the trend. They earn through podcast subscriptions, which allows them to invest in tools to improve their podcasts and gain even more subscriptions as a result.
You’ve seen it many times—an influencer posting a photo or a video on their Instagram feed that declares them as an ambassador for a specific brand. Brands are tapping into the world of influencers because they tend to bring in revenue to their business. It is also an excellent way for brands to spread awareness these days.
How an influencer gets paid through this specific avenue works similarly to paid sponsorships. In exchange for their endorsement, they get paid in either cash or freebies. There are are also ongoing brand ambassadors that get a continuous flow of money from the brands that they sponsor.
Some influencers launch digital products to earn. The most common form of a digital product is an e-Book because it’s relatively easy to produce and distribute. Some influencers also use their platform to promote their work and connect to their target audience.
Influencers And Their Taxes
Influencers are not traditionally “employed,” but they do have to pay taxes. In Australia, there is an Instagram Tax that was introduced in July 2019. The tax requires influences to pay tax on income that they make through sponsorships and endorsements.
Due to this, influencers must learn how to manage their taxes. The problem is that bookkeeping is not an easy job, especially if you lack experience. Most influencers hire an accountant to help them sort out their taxes. Since they need to follow the Individual Income Tax Rates that are specified by the ATO, certain deductibles, such as internet costs, computer and camera equipment, communication expenses, and outsourced design and advertising must be outlined to complete a tax return.
As you can see, these can send an influencer who is inexperienced in accounting for a loop. Nevertheless, it is essential to do tax returns accurately, especially for an influencer for whom tax management is more complicated due to many factors.
Without an experienced and knowledgeable accountant, an influencer may not be able to file their taxes correctly and on time. It could also lead to harsh consequences for the influencer. That’s why most influencers in Australia have their own accountant to make sure that their taxes and overall finances are managed well.
An influencer’s life may seem incredibly easy and fun, but it’s an entirely different world when it comes to their taxes. Regardless of how popular they become, they have an obligation to file their taxes on time or they might jeopardize their entire careers.
Do you need help with your taxes? The E-commerce Accountant can help you manage your taxes well. Contact us today.