How much do YouTubers make?

There’s just not that many videos I want to watch.” So said YouTube co-founder Steve Chen in 2005, concerned about YouTube’s long-term viability.

Since then, YouTube has exploded. 1.8 billion people use it every month. 25% of the world’s population. Collectively, they watch 1 billion hours of content every day.

So how much do YouTubers get paid? T-Series, owner of the most subscribed to YouTube channel, makes an estimated £433.5k-£6.9m per month. Earnings for the top 10 highest paid YouTubers in 2018 range from £17 million per year (Ryan ToysReview) to £11 million (Logan Paul).[1]

Highest-paid YouTubers’ Annual Earnings 2018

  1. Ryan Toysreview £17m
  2. Jake Paul - £16.5m
  3. Dude Perfect - £15.5m
  4. DanTDM - £14m
  5. Jeffree Star - £14m
  6. Markiplier - 13.5m
  7. VanossGaming - £13m
  8. Jacksepticeye - £12m
  9. PewDiePie (Felix Kjellberg) - £12m
  10. Logan Paul - £11m

In most cases, all they needed was a webcam, a winning personality, and a dash of business savvy. How did they do it? And is it a viable career path?

How to make money on YouTube

YouTubers make their money from five major revenue streams:

Advertising

Those irritating adverts that bookend (and sometimes intrude on) your favourite videos? The channel owner gets 55% of the revenue generated from them.

How much that equates to depends enormously on territory and audience. A major corporate placement in a high traffic country like the US or UK is worth more than a small business ad in Argentina, for example. However, roughly speaking, it works out to £2-£8 per 1,000 viewer engagements.

Affiliate links

If your videos feature any products, you can earn money by sending your viewers to buy them on Amazon, ebay or any number of stores. Join an affiliate network and you get a commission from sales you send their way. Dr Jake’s Very British Reviews – then with 30,000 subscribers – made approximately £1,500 in 12 months this way.

Sponsorship

YouTubers tend to be popular with younger audiences that are difficult to reach with mass media like radio and television. So big corporates looking to buy youth attention often turn to YouTube influencers. They tend to pay £8-£40 per 1,000 views. If the video hits one million views, the YouTuber earns £7,500-£40,000. However, this is usually reserved for the cream of the stream.

If you are doing sponsorship deals you must declare your commercial interests correctly, including ticking the ‘paid promotion’ box before publishing content that advertises a product or service. The Advertising Standards Authority has published detailed guidance for social influencers.

Merchandise

Once you’ve built a huge and dedicated following, you can start selling merchandise – t-shirts, hats, mugs and so on. Once you get really big, like Zoella or PewDiePie, you might cross into the mainstream with a beauty line at Superdrug – worth around £1 million per year – or a New York Times bestselling book deal.

Donations

If you have a deep connection with your followers – who are dedicated to your content – they might be persuaded to sponsor you with something like Patreon. The average contributor donates £5, with Patreon taking a 5% cut. At one point, The Comedy Button had 5,266 patrons from a 24,500 subscriber-base paying £10,000 per month.

Paying tax on YouTube earnings

If your earnings are below £1,000 then it is covered by your annual trading allowance. If that’s the case there’s no need to declare it to HMRC. Anything over that must be submitted on a self-assessment tax return, deducting the £1,000 allowance. Find out more about paying tax on YouTube earnings on the HMRC website.

It’s not easy

There may be some tantalising figures in there, but these are exceptions, rather than norms. Yes, real money can be made on YouTube, but it’s estimated that even the top 3% of YouTubers earn an average of around £13,000 per year.

Indeed, when Dr Jake’s Very British Reviews broke down his YouTube income, it came to about £8,000 for the year. His “hobby” is doing very well. But it’s certainly not a living.

By contrast, if you work a 40-hour week on the of £9 per hour, your annual earnings come to £18,720.

Put simply, there are easier ways to earn money. Yes, tremendous sums can be pocketed from vlogging or streaming. But in most cases, you’ll earn more per hour in a minimum wage job.

What’s the best way to make money in the UK?

It sounds boring, we know. But the best way to boost your earnings is to go to university. On average, graduates earn £10,000 per year more than their non-graduate peers.

Study Economics at Cambridge and you could be earning nearly £70,000 per year five years out of university. You could be on nearly £40,000 just one year after graduating with a Computer Science degree from the Imperial College of Science, Technology and Medicine. The average Medicine graduate earns £46,500 per year, five years after graduation.

Unlike the big streaming numbers – which apply to only a handful of people, with the rest earning less than minimum wage – these figures are averages. Attainable to anyone who can complete a degree.

YouTubing and streaming might be profitable for the select few right now, but there’s no guarantee it will continue to be a money-maker. Investing your time and money in it is a gamble.

It takes a pension pot of around £300,000 to achieve a reasonable standard of living in retirement. Avoiding poverty later in life means saving. And the earlier you start, the easier it is. Partially because you get in the habit, partially because compound earnings – from interest or share growth – makes much more of your money over a longer period of time.

Put £1,000 into a stocks and shares ISA at 18 and you could have £9,905.97 by the time you’re 65, assuming a moderate growth of 5%. Save the same £1,000 at 30 and you’ll only have £4,321.94.[2]

The earlier you start saving, the less you need to put aside.

That goes double if you follow Warren Buffett’s lead. The infamous stockbroker and 3rd richest man in the world made his fortune by buying shares and holding on to them for a lifetime. He bought his first stocks at the age of 11 and has famously held shares in Coca Cola since 1988, with no intention of selling them. He’s currently worth £63 billion.

If you’ve got a Child Trust Fund or Junior ISA about to mature, imagine what you could do with it. We’re not saying you’ll end up with billions like Buffett. But you could certainly secure your future. And you wouldn’t have to stream for 60 hours a week.

[1] Figures originally stated in dollars, converted to sterling on 30th April 2019.

[2] Calculated using The Calculator Site