How to Setup Payroll for OnlyFans: Tax & Compliance Tips

Once you start making serious money on OnlyFans, you’ll hit a point where hiring help just makes sense. Maybe it’s a virtual assistant. Maybe it’s someone editing your videos or managing your inbox. If you’re paying people to support your business, payroll becomes something you can’t ignore.

Knowing how to setup payroll is key. It’s not just about writing checks. It’s about staying legal, avoiding tax headaches, and building a real business that can grow.

Why Payroll Is a Must-Have for Growing OnlyFans Creators

OnlyFans creators often start out doing everything solo. But when income grows, so does the workload. At some point, it’s smart to bring in support. That’s when paying people legally starts to matter.

Here’s what setting up payroll helps you do:

• Handle federal and state tax requirements
• Pay your staff on time
• Track expenses for better tax write-offs
• Avoid IRS penalties
• Keep your business running smoothly

Even if you’re just paying one person, the IRS still expects you to follow the rules.

Step 1: Get a Federal Employer Identification Number (EIN)

An EIN is like your business’s ID number. You’ll need it to file payroll taxes, pay employees, and open business bank accounts.

Apply for your EIN online through the IRS website. It’s free, and you’ll get it immediately once the form is submitted.

If you’re self-employed and not hiring anyone yet, it still helps to separate your personal and business finances. That makes tax season much easier.

Step 2: Classify Your Workers Correctly

The IRS wants to know if the people you’re paying are employees or independent contractors. The rules are different for each.

Worker Type	Do You Withhold Taxes?	Who Files Their Taxes?	Example Roles
Employee	Yes	You	Full-time assistant
Independent Contractor	No	Them	Freelance video editor

If you control when and how someone works, they’re likely an employee. If they work on their own schedule and handle their own tools, they’re likely a contractor.

Misclassifying workers can lead to tax penalties and back payments, so don’t skip this step.

Step 3: Set Your Payroll Schedule

Your payroll schedule is how often you pay your team. You can choose weekly, bi-weekly, or monthly. Bi-weekly is a common middle ground. It’s frequent enough to keep staff happy and easier to manage than weekly pay.

Some states have rules about how often you must pay employees. Check your state laws or contact local agencies before finalizing your schedule.

Step 4: Choose Payroll Software

Doing payroll by hand sounds simple until you’re buried in tax forms and deadlines. Good payroll software makes your life easier by calculating taxes, filing forms, and paying your team automatically.

Look for software that supports:

• Contractor and employee payments
• Federal and state payroll taxes
• Direct deposit for employee paychecks
• Automatic tax filing for federal income tax, Medicare, and Social Security
• Integration with your bookkeeping tools

Popular options for small businesses include Gusto, QuickBooks Payroll, and Patriot.

Step 5: Handle Tax Withholding and Deposits

If you hire employees, you’ll need to withhold taxes from their pay and send those amounts to the IRS.

This includes:

• Federal income tax
• Social Security
• Medicare taxes
• State taxes, if your state requires it

Each employee must fill out a W-4 form, which helps you calculate how much to withhold. Your payroll software will use this info to do the math.

You’ll need to deposit taxes regularly. Most small businesses send tax payments either monthly or semi-weekly.

Step 6: File Payroll Tax Forms

Along with paying taxes, you need to file the right forms at the right time. These forms go to the IRS and your state.

Form	Used For	When to File
W-2	Reporting employee wages	Annually
W-3	Summary of all W-2s	Annually
1099-NEC	Payments to independent contractors	Annually
Form 941	Federal payroll tax reporting	Quarterly
Form 940	Federal unemployment tax	Annually

State requirements may vary. Some states have their own forms and timelines, so be sure to check.

Step 7: Keep Payroll Records

You’re required to keep detailed payroll records for at least three years. This helps you stay organized and protects you during audits.

What to keep:

• Pay stubs
• Payroll reports
• Employee information
• Tax deposit records
• Contractor invoices
• W-4s and 1099s

If you use payroll software, it should automatically store most of this for you. Just be sure to download and back up key reports each quarter.

What If You’re Self-Employed?

If you’re not paying anyone else yet, you don’t need payroll, but you still need to pay taxes on your OnlyFans income.

OnlyFans doesn’t withhold taxes, so you’re responsible for:

• Self-employment tax (includes Social Security and Medicare)
• Federal income tax
• Quarterly taxes (sent to the IRS four times a year)
• State taxes, if applicable

Your OnlyFans earnings count as business income, which makes you eligible for tax deductions like:

• Home office deduction
• Internet and phone bills
• Equipment and software
• Content-related travel
• Editing tools or subscriptions

Deductions reduce your gross income, which lowers your tax obligations and keeps more money in your pocket.

FAQs

Do I need to run payroll if I’m not hiring anyone?

No, you don’t need to run payroll if you’re working alone. But you still have to track your OnlyFans income and pay self-employment and income taxes. Skipping quarterly tax payments can lead to penalties, so it’s important to stay on schedule.

Can I pay family or friends helping with my content?

Yes, but treat them like any other worker in your business. You still need to classify them as either an employee or independent contractor. Make sure you track payments and file any required tax forms at the end of the year.

What if I paid someone last year but didn’t file anything?

You may need to file a late 1099-NEC or W-2 depending on how they were paid. It’s better to correct it now than wait for the IRS to catch it. An accountant can help fix it, file any late forms, and avoid penalties going forward.

Is payroll software worth the cost for just one or two people?

Yes, especially if you want to avoid IRS fines or filing mistakes. Payroll software calculates withholding taxes, files forms, and deposits payments automatically. It saves time and reduces stress, even if your team is small.

Conclusion

Setting up a payroll system is a smart move once your OnlyFans income starts to grow. It helps you stay organized, meet tax obligations, and pay your team on a regular pay period without guesswork. Whether you’re hiring one person or building out a small team, a solid system saves time and lowers your risk of mistakes.

You don’t have to handle it all alone. If you’re earning real money and need help with payroll, taxes, or choosing the right pay period, The Onlyfans Accountant is here to support you. We make sure everything is set up the right way, so you can stay focused on your content while we handle the business side.

Your path to complete financial prosperity begins now. To master the art of tax planning and transform your future financial outlook at tax time, contact The OnlyFans Accountant for a free consultation. Want to learn how to maximize deductions, track expenses like a pro, save more, and navigate tax season like a boss? Get your FREE copy of our eBook.

Need assistance or guidance with completing your OnlyFans taxes? Call us today! Our experts are ready to help you navigate your tax obligations and maximize your deductions.