OnlyFans is taking the social media world by storm. It now ranks alongside YouTube, Instagram, and TikTok as one of the most influential sites for aspiring influencers. By the revenue/employee ratio, it far surpasses ChatGPT creator OpenAI! Numerous celebrities, including musicians, athletes, and actors, have joined the platform.
However, OnlyFans is perhaps best known for its reputation as a platform featuring adult content. This article will guide you on becoming a creator on OnlyFans and, most importantly, what tax considerations to remember.
What exactly is OnlyFans?
At its core, OnlyFans is a social network akin to Facebook, Instagram, TikTok, and others. However, it operates differently: while users can create free accounts, accessing content, mainly photos, videos, and live streams, requires payment or a subscription.
Direct Payment for Content: Unlike other social media platforms that monetize through advertisers, users pay individual creators directly for access to content.
Choice and Interaction: Users choose which creators they follow and can contact them directly.
Creators and celebrities use the platform to offer exclusive content behind a paywall, ensuring that OnlyFans subscribers are the only ones with access. This content is not shared on other platforms, especially not for free.
Although this pay-for-content model is not groundbreaking (as platforms like Patreon, Twitch, and Substack offer similar options), OnlyFans has found unique success, mainly due to its adult content.
A secret behind its growth
Media often refer to OnlyFans as an "adult platform" due to the significant number of models, adult performers, and sex workers who use it to offer explicit images and videos. Some celebrities have also joined, sharing more revealing content than they might on other platforms where it would typically be prohibited.
The platform wasn't initially focused on explicit content. OnlyFans was founded in 2016 in London by brothers Tim and Thomas Stokely to give artists a new way to offer exclusive content to their fans. The pay-for-content model was part of this from the start. In 2018, Leonid Radvinsky, known for the adult platform MyFreeCams, acquired a majority stake in OnlyFans, steering the company toward adult content.
This shift, combined with the participation of stars like DJ Khaled, rapper Cardi B, former Disney star Bella Thorne (“Famous in Love”), and the influence of the COVID-19 pandemic, fueled a massive increase in popularity.
How to earn money on OnlyFans
Unlike many social media platforms, OnlyFans allows for direct monetization of content. To start, you need to create an account and register as a creator. This requires verifying your identity and age (only those over 18 can post content). A unique requirement is to take a selfie holding your ID for verification.
Once your profile is set up, you can upload photos, videos, or text. There are three main ways to earn money:
Pay-per-view: Set a price, usually between $1 and $50, for individual photos or videos that users must pay before accessing.
Subscriptions: Charge a monthly fee for subscribers to access your content, ranging from $5 to $50. The average subscription fee is around $10.
Tips: Followers can give tips during chats or live streams, ranging from $5 to $100. Often, creators offer rewards for tips, such as exclusive content, responses in DM, or personalized videos.
OnlyFans accepts credit cards from providers like Visa/Mastercard, Discover, and Maestro (via debit). PayPal has not been supported for some time.
Creators receive payments within 7 days, which is relatively fast compared to other countries where payouts take up to 30 days. Payments are made directly to your bank account.
This is the moment you should recognize revenue in your accounting and tax declarations.
How much can you earn monthly on OnlyFans?
Your earnings depend on the number of posts and followers you have. However, creating, posting, and engaging with fans is demanding work. Success requires consistent content uploads and active interaction to keep followers engaged.
Those who can break through the valley of 0 to 100 subscribers earn tens of thousands of euros per month.
Estimates of new creators earning between €1,000 and €2,500 per month are difficult to verify. In 2023 OnlyFans processed $6.6 billion in payments from fans to creators, a 19% increase over a single year. OnlyFans retains 20% of this, with the remaining 80% paid out to creators.
Key Strategies for Success
To maintain a sustainable income on OnlyFans, a strategic approach is necessary:
Create an attractive profile: Include an engaging profile photo and description and update it regularly.
Post Regularly: The more you post, the more justified your subscription fee is. Many creators post daily.
Explore diverse content: You don’t have to post explicit content. OnlyFans supports all types of creativity, from crochet tutorials to gaming streams to fitness workouts.
Promote on other platforms: To attract new followers, be active on Instagram, Twitter, or Telegram. Use teasers or previews of your exclusive content to draw interest.
Once you have a large follower base, consider selling merchandise through OnlyFans. The platform partners with the social-selling platform Spring, allowing you to integrate a store and sell items like stickers, T-shirts, and backpacks.
Do you need to register as self-employed for OnlyFans?
As an OnlyFans creator, you engage in self-employment. Since you earn money from content, registering a business is usually necessary. Your earnings classify you as a sole trader (Gewerbetreibende:r), especially if you sell merchandise.
You should complete the "Fragebogen zur steuerlichen Erfassung", detailing your activities and estimated earnings on OnlyFans and other income sources for tax assessment.
Suppose your OnlyFans content is educational or artistic (such as fitness coaching or dietary advice). In that case, you might qualify as a freelancer, exempt from trade tax.
However, specific criteria must be met for this status. The German Income Tax Act (§ 18) outlines recognized professions, with further clarification from Federal Tax Court rulings and Ministry of Finance communications. Your local tax or trade office will make the final determination.
Which taxes apply to OnlyFans creators?
If your earnings exceed €24,500, you must pay a trade tax. Below this threshold, you are exempt. Additionally, if your annual revenue surpasses €22,000, you are subject to VAT. If your earnings in the previous year were under €22,000 and you expect less than €50,000 in the current year, you can use the small business regulation to avoid trade and VAT.
In any case, you will be subject to income tax and obligated to submit EÜR and income tax declaration.
According to the European Court of Justice ruling, OnlyFans creators are not required to remit VAT directly to the tax office, such as through the One-Stop-Shop procedure. The previous rule, where OnlyFans handled VAT for creators, has been repealed. The platform itself now bears this responsibility. You can request a refund for any overpaid amounts in the past. Inform your local tax office and obtain confirmation to ensure compliance.
How to manage accounting and taxes as an OnlyFans creator?
Norman is the perfect all-in-one accounting and tax filing platform for creators and digital nomads. Register for self-employment for free, record earnings and business expenses (e.g., camera, fees, contractors), and file taxes directly from Norman. No tax advisor or Elster account needed.