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Making Money On Instagram
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Making Money On Instagram – A Complete Guide To It

More than 60 million pictures are uploaded to Instagram every day and given hearts. Since the platform is particularly easy to use, its popularity has increased continuously since it was founded in 2010. If you want to register, you have to be at least 13 years old, but the use is also increasing rapidly among our later generations, who are 50 years or older. This makes Instagram one of the most valuable social media platforms of our time. It has already overtaken many others because it combines simple chatting with visual stimuli. Even more; It is not uncommon for Instagram to be the jumping hill for new trends.

So how can you use Instagram to make money? When is a trade license required? Should you use Instagram differently than a private person if you want to operate your account commercially? We will now take a closer look at these and many other questions in the guide.


There are basically two different ways to make money on Instagram: active and passive.

  • Those who passively earn money with Instagram use the platform for their own advertising purposes. The money is basically earned elsewhere, for example through services or an online shop. This is then advertised on Instagram by addressing the right target group within its own reach.
  • If you actively earn money with Instagram, this comes about through direct cooperation with companies. You advertise products in your posts and receive payment for it. This is the classic influencer. An alternative to this would be to advertise products including setting affiliate links in order to collect a commission on successful leads.

In both variants, a correspondingly long-range is necessary. This is not only made up of the number of followers and likes but also requires a certain interaction rate. About the comment area. Because only those who actually reach their target group and receive a reaction from them can credibly convey that they are the right advertising partner.

Also Read: How to promote your Instagram for free?


Many influencers choose Instagram because this platform makes it particularly easy to create posts. YouTube, for example, would require a lot of post-processing for the videos, on Twitter the character limit puts an end to it. Facebook is often replaced by other platforms by many people, so basically all that remains is the photo platform from the same company.

In 2012, Instagram was bought by Facebook for around 760 million dollars. Since then it has been possible to couple both accounts in order to get maximum profit from them. We’ll get to that later.

Since networking is so easy on Instagram, there are more and more platforms on which you can register in order to get to cooperation partners. Many companies also often contact the influencer himself to get a collaboration going. The compensation is often very different here. The most common are:

  • A direct payment.
  • Free products.
  • A discount on the products you want.

What exactly you get is usually based on the range.

Since many companies try to spread their names on the web through as many accounts as possible, they naturally strive for the most profitable cooperation possible. They are looking for micro-influencers (these are accounts with a few thousand followers) and provide them with free products. Only when these numbers skyrocket and there is also a corresponding interaction rate does the willingness to pay correctly increases.


In Australia-speaking countries, you can counter 10,000 Instagram followers with around 70 dollars. So an account with 20,000 followers can charge around $200 per advertisement.


Anyone who enters into specific collaborations on Instagram basically transforms their account into advertising space. With this you are aiming to make a profit and as soon as this is available, the legislator provides for business registration. So you are not considered a freelancer either. This applies to payments, as well as free products or the use of affiliate links.

In fact, sponsored products are also a form of payment. These must therefore be taken into account in the tax return! What else you have to consider with regard to taxes is explained in the next point.


Registration can either be done online or by visiting your local trade office. A photo ID is required for this, which you can also send digitally in the form of a scan when registering online.

Depending on the federal state, a registration fee of 20 to 30 euros should be expected.

You state services on the Internet as an activity. Alternatively, online marketing or internet advertising are also suitable. Each of these trades is applicable, so it depends on what else you plan on doing besides Instagram once the trade is registered.

You must be of legal age to register your business. Otherwise, you need the authorization of a legal representative and the approval of the Guardianship Court to do business. In such cases, it is therefore important to tell your parents about your plans so that they support you and they can actively support you.


As a business owner, of course, you also have to deal with the subject of taxes. If you get enough, it is advisable to consult a tax advisor, because you can also claim the costs incurred for tax purposes.

In general, depending on the amount of your income, you can expect 14 to 42% tax. The most important taxes for you are:

  • The sales or value-added tax. As long as you are still a small business owner, you do not have to identify them. The small under-regulation is in effect until you generate more than 22,000 in sales in the previous year and more than 50,000 in the current year. Important: This is an AND rule, so both points must be met, otherwise you will remain a small business owner.
  • The business tax. But you don’t have to pay for that either at the beginning. You exceed this limit with an annual profit of more than 24,500 euros.
  • And then there is the income tax. This is also important for you if you are not yet generating high income. As soon as you exceed the statutory exemption of 8,652 euros in profit, tax payments become due.

Now you have just read the two terms profit and turnover a lot. They are not the same. Your sales are nothing more than what you earn. As soon as you have deducted all business expenses from this sum, an income amount remains. And this is the profit.


Many employers have a clause in their contracts that their employees are not allowed to pursue secondary employment without express consent. It is important to note this, otherwise, you can be terminated without notice.

Income is great, but don’t be tempted to spend it down to the last cent. Because now that you are an entrepreneur, you also have to think economically. Without a profit, you cannot develop your business further and you will not want to pay taxes on your private money. The easiest thing to do here is always to put away half of all income in order to prepare for bad times.

Unless you are self-employed as a part-time job, you also have to deal with the topic of social security and you should then create reserves for that too.


Of course, you are not allowed to handle it in such a way that you only pursue a paid cooperation once and then never again, but then do not register a business. There is also an intention to make a profit.

Any tax exemption limits are aimed at again from a private sale. For example, because you are selling your car or renting your apartment for three months for a longer stay abroad in order to continue to cover the running costs.

This means that you have to be clear in advance about what exactly you are planning to do with your Instagram account and whether such a paid cooperation can be repeated.

  • You should have a dedicated community.
  • Think of a good concept for Instagram to sustainably increase the reach of your account.
  • Start to think from the company’s point of view: You don’t just want to use the size of your reach, but above all the trust of your community to their advantage.
  • Don’t make every one of your posts a paid cooperation to stay credible and not to lose the trust of your followers.
  • Start seeing Instagram as your job and no longer just your hobby.
  • Switch Instagram to the business function. This gives you access to numerous analysis values ​​about your range.
  • Link Instagram with Facebook to build reach on both platforms.


On the one hand, you can of course write to brands and companies yourself, or you can register on platforms that have been specially created for this purpose.

Before the first contract is concluded (even communication to work together constitutes a contract with a binding commitment), you should be clear about how much you want to overcharge for the cooperation. Consider the size of your reach, the associated working hours, and also what business expenses you have.

Behave professionally when communicating with your business partner. In the media industry, it is common for people to be on two terms with each other. However, if you find that the entrepreneur is seizing you, you should also move on to it.

Prepare a so-called media kit in which you list a few important hard facts about your reach. This is how you show your counterpart that you are well prepared and professional. He will feel that he is in good hands with you and that he has found a good advertising partner here!


The trust of your followers is the key to your success. If you lose it, you lose the entire base of your earnings. You should therefore absolutely comply with the legal requirements for advertising labeling and not lie to your followers if you earn money with your account.

Marking with the hashtag #sponsored is not sufficient in German-speaking countries, as various surveys have shown that users are not aware that they are currently looking at advertising. Therefore, you have to be very clear and use the hashtag #advertising. Alternatively, #display is also a possibility.

By the way, it doesn’t have to be a hashtag, you can just write the word down. With its blue text, the hashtag basically only ensures that the term really stands out. Also, many companies are looking for possible advertising partners in this hashtag.

  • The advertising mark must be conspicuous and ideally placed at the beginning of the post.
  • If you advertise your own products (from your online shop, your own book, etc.), no explicit advertising marking is required, as long as the caption expressly states that it is your own company that you are currently working on.


Not only on YouTube but also on Instagram, cracks are now being taken against so-called surreptitious advertising. Many influencers, therefore, decide to generally mark everything with advertising that could be understood as such. For example, because a product can be recognized on it. If you want to do that too, because you want to be on the safe side, you have to define that clearly. In this case that would be: advertising through brand recognition or advertising through branding.

If you don’t, it could possibly be understood to mean that the company whose product can be recognized in your postpaid you for it. But if that has not happened, you can also receive a warning for this.



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