How Much Money Can You Really Make From the Substack?
Considering Substack’s low sign-in costs, a paid subscriber base that has nearly doubled in the last 12 months, and news that its top contributors are making up to $ 1 million a year , you might be wondering: Can I really make a living publishing? to a newsletter publishing platform? If you have an established audience willing to pay for your content, then yes, but royalties are no joke either. Here’s a look at how much you could earn.
How Substack works
Substack is a newsletter tool that allows you to manage subscribers, send emails and track your engagement with an analytics engine that records the total number of clicks, your email open rate when people share your messages, and more. The platform also has a paid subscription model that allows you to charge subscribers a monthly or annual fee (minimum $ 5 / month or $ 30 / year), and also gives you the flexibility to pay to access your posts, publish them publicly, or choose. hybrid option. both. Another nice feature is that your archive and email lists are portable, which means you can log out and switch to another platform later if needed.
How you can make money on Substack
When using a paid subscription model, the math for determining your potential income is actually quite simple: Multiply your subscription cost by the number of paid subscribers. For example, a stable base of 1,000 subscribers paying $ 5 a month will bring you $ 60,000 a year from Substack – excluding fees and taxes of course (more on that in a moment).
There is also a Substack Pro program that pays various cash advances to creators along with a reduced percentage of subscription income earned over a limited time period, usually 1-2 years. However, this is only an invitation and probably not an option for you unless you are already an established writer with a large following.
Fees and taxes will cost you
While it is easy to see how you can make money on the platform, there are also fees and taxes to consider, and they can be significant. Substack gets a 10% share of all subscription revenue, and the platform’s financial services provider, Stripe, takes another 2.9%, plus a 30 cent commission per subscriber. The Financial Times estimates that fees actually account for about 20.7% of your income . This means that if you make $ 60,000, your earnings will be closer to $ 47,580 before taxes. Federal and state tax rates differ, but assuming the average rate is 27%, you end up with $ 34,733 in home wages, far less than the original $ 60,000.
Generally, you should expect to lose nearly half of your Substack income, as the popular Substacker Lenny Racicki confirms in this tweet:
Bottom line
As with social media platforms like TikTok or YouTube , if you can’t build an audience on Substack, you won’t make much money. To really make money on your newsletter, you need to attract about 500 paid subscribers, which you can keep hooked for $ 5 a month by offering them frequent original content. Given that Substack estimates that only 5-10% of newsletter readers will be paid subscribers, this means that you really need a reader base that approaches 10,000.