How to Pay Yourself as an Esports Player or Content Creator

You’ve formed your LLC or S-Corp. You’ve made the jump from hobbyist to business owner. Now the question hits:

How do you pay yourself without creating tax headaches?

Most esports players and content creators don’t think about this part until tax season, and that’s when it gets expensive. The way you take money out of your business decides not just how much tax you pay, but also how clean your books are if the IRS ever looks closer.

Why Getting It Right Matters

If your income is spread across Twitch payouts, YouTube ad revenue, brand deals, merch, or tournament winnings, it’s tempting to just transfer funds to your personal account. That works, until it doesn’t. Without a system, you risk:

• Overpaying in taxes
• Messy cash flow and missed expenses
• Trouble if the IRS audits your business

The fix is simple: know your business structure and pay yourself the right way under that structure.

Sole Proprietor or Single-Member LLC

This is the entry-level setup. For tax purposes, you and the business are the same.

• How you pay yourself: Take an owner’s draw: move money from the business account to your personal one.
• How it’s taxed: Every dollar of net profit is subject to income and self-employment tax, even if you leave some of it in the business.

The key here is discipline. Always leave enough behind to cover taxes and future expenses.

S-Corporation

This is the upgrade most esports players and content creators make once income grows. It offers real tax savings if you do it properly.

• How you pay yourself: First, run a reasonable salary through payroll. Then, take additional profits as distributions.
• How it’s taxed: Salary is taxed like a regular paycheck. Distributions avoid self-employment tax.

For example, if your business nets $100,000, you might pay yourself $50,000 as salary and take $50,000 in distributions. That second half escapes self-employment tax, which can save thousands.

Best Practices That Keep You Out of Trouble

• Keep personal and business money separate, always.
• Use payroll software for S-Corps so your salary is documented correctly.
• Set aside 25–30% of every payment you receive for taxes.
• Talk to a tax advisor before you start pulling distributions.

Mistakes That Cost Money

• Taking all profits as distributions with no salary (an instant IRS red flag).
• Ignoring quarterly estimated taxes.
• Failing to document how you’re compensating yourself.
• Treating the business account like it’s personal cash.

Final Thoughts

Here’s the truth: you can figure this out on your own. Plenty of esports players and content creators do. But I’ve also seen those same esports players and content creators overpay thousands in taxes, miss deductions, or get hit with penalties because they didn’t know the rules as well as they thought.

Working with a CPA who understands esports players and content creators means you’re not guessing. You’ll have a clear, tax-smart pay structure that keeps your cash flowing, keeps you compliant, and keeps more of your income in your pocket.

When you’re building a career that already demands so much of your focus, you don’t need to spend your nights untangling tax codes or worrying if you’re doing it wrong. My job is to make sure you get paid the right way, save what you should, and protect the business you’re working so hard to build.

Schedule a 30-minute strategy session and I’ll help you design a pay structure that works for your income, your goals, and your long game.

About Dark Horse CPAs

Dark Horse CPAs provides an integrated suite of services including tax, accounting, fractional CFO, and wealth management to small businesses and individuals across the U.S. The firm was established to transform the client experience by offering personalized, high-quality services that small businesses and individuals deserve. As Dark Horses in their industries, these businesses benefit from advanced tax strategies and accounting insights typically reserved for larger companies. With a nationwide presence and a team of dedicated professionals, Dark Horse CPAs is committed to your success. Get a quote today.