NIL & Athlete Income: Managing Your Athletic Brand as a Business

Your name, image, and likeness is your first business

The NIL Reality

Since July 2021, college athletes can profit from their Name, Image, and Likeness (NIL). And increasingly, high school athletes are too.

Here's what most young athletes don't realize:

NIL income is business income. You're not an employee — you're an entrepreneur.

That means:

You're responsible for your own taxes
You can (and should) deduct business expenses
You need to plan for irregular income
You're building a business, not just getting paid

Who Can Earn NIL Income?

High School Athletes

Rules vary by state:

State Approach	What It Means
Permissive (most states)	High schoolers can earn NIL with few restrictions
Restrictive	Some limitations on timing or endorsement types
School-specific	Some schools have additional policies

Iowa: High school NIL is permitted under IHSAA/IGHSAU rules (updated August 2022). Key restrictions: no school logos/uniforms, no pay-for-play, no prohibited products. See Iowa High School NIL Rules → for the complete eligibility guide.

College Athletes

Since July 2021:

All NCAA athletes can earn NIL
No NCAA approval required
Must follow school and conference policies
Can't be pay-for-play (directly tied to athletic performance)

Types of NIL Income

Category	Examples	Tax Classification
Social media	Sponsored posts, brand deals	Self-employment
Appearances	Autograph signings, meet-and-greets	Self-employment
Licensing	Name/image on products	Self-employment
Camps/coaching	Running sports camps	Self-employment
Content creation	YouTube, podcasts, streaming	Self-employment
Endorsements	Representing a brand	Self-employment

Notice a pattern? All NIL income is typically self-employment income, not W-2 wages.

The Tax Reality of NIL

Self-Employment Tax

As a self-employed person, you pay:

12.4% Social Security tax
2.9% Medicare tax
Total: 15.3% on net profit

This is in addition to income tax.

Example: $10,000 in NIL Income

Tax Type	Calculation	Amount
Self-employment tax	$10,000 × 15.3%	$1,530
Federal income tax (12% bracket)	$10,000 × 12% × 92.35%*	~$1,100
State income tax (Iowa ~6%)	~$600	~$600
Total Tax Owed	—	~$3,230

*You can deduct half of SE tax from income

Translation: Set aside 30-35% of every NIL payment for taxes.

Quarterly Estimated Taxes

If you expect to owe $1,000+ in taxes, you should pay quarterly:

Quarter	Due Date
Q1 (Jan-Mar)	April 15
Q2 (Apr-May)	June 15
Q3 (Jun-Aug)	September 15
Q4 (Sep-Dec)	January 15

Why? Avoid underpayment penalties. The IRS expects taxes throughout the year.

Deductible NIL Expenses

As a business, you can deduct expenses that reduce your taxable income:

Deductible	Examples
Equipment	Camera, ring light, computer, editing software
Agent/manager fees	Typically 10-20% of deals
Professional services	Accountant, lawyer, financial advisor
Marketing	Website, business cards, promotional materials
Travel	Mileage and travel for appearances (business portion)
Training	Courses specifically for content creation or business skills
Home office	If you have dedicated space for NIL work

Key rule: Must be "ordinary and necessary" for your NIL business. Keep receipts!

Example: Deductions Reducing Taxes

Scenario	Without Deductions	With Deductions
NIL income	$10,000	$10,000
Deductible expenses	$0	$2,000
Taxable income	$10,000	$8,000
Tax owed (~30%)	$3,000	$2,400
Savings	—	$600

NIL as Brand Building

The Long Game

Short-term thinking: "How much can I get paid right now?" Long-term thinking: "How am I building an audience and reputation?"

Short-Term Approach	Long-Term Approach
Take any deal	Be selective about brand alignment
One-time payments	Build recurring relationships
Transactional	Build genuine audience
Cash now	Enterprise value later

The MrBeast Example

MrBeast (Jimmy Donaldson) started making YouTube videos at age 12. For years, he made almost nothing. Now he's one of the highest-paid creators in the world.

The lesson: Building an audience is an investment. Early NIL income is great, but the real value is the platform you build.

Your Content Is Your Product

Traditional Athlete	NIL-Era Athlete
Performance only	Performance + content
Fame fades after career	Audience can last forever
One income stream	Multiple income streams
Dependent on teams	Own your platform

Protecting Your NIL Income

Don't Spend It All

NIL income is often:

Irregular (big checks, then nothing)
Uncertain (deals fall through)
Taxable (30-35% goes to government)

Rule of thumb:

35% → taxes (set aside immediately)
20% → savings/investing
45% → spending (if you must)

Get Professional Help Early

Professional	When You Need Them
Accountant/CPA	When earning $5,000+/year in NIL
Agent	When deals are complex or high-value
Financial advisor	When you have significant assets to manage
Lawyer	For contract review on major deals

Warning: Many advisors target young athletes. Vet them carefully. Ask for references. Understand their fees.

The Roth IRA Opportunity

NIL income is earned income, which means it unlocks Roth IRA contributions.

NIL Income	Roth IRA Contribution
$3,000	Can contribute up to $3,000
$7,000+	Can contribute full $7,000 (2024 limit)

A high school athlete earning $7,000 in NIL who puts it all in a Roth IRA is setting up for massive long-term wealth.

See Roth IRA for Teens → for details.

What ISP Teaches

The NIL Literacy Curriculum

ISP's Financial Skill Tree includes NIL-specific modules:

Module	What Students Learn
NIL Basics	What NIL is, how it works, legal considerations
Tax Reality	Self-employment tax, deductions, quarterly payments
Brand Building	Content strategy, audience growth, platform selection
Deal Evaluation	Assessing offers, knowing your worth, contract basics
Financial Protection	Saving, investing, avoiding exploitation

The "You Teach" Connection

Remember: ISP students create "You Teach" content as part of learning.

The NIL connection: That content creation IS NIL preparation. Students are:

Building content creation skills
Growing their personal audience
Creating portfolio pieces
Practicing the work of being a creator

Every "You Teach" video is practice for a sponsored post.

The Financial/Brand Skill Tree

In MyPath, the Financial Architecture includes:

Attribute	What It Measures
Savings Rate	Are you keeping money?
Revenue Generation	Are you earning?
Brand Building	Is your audience growing?
Tax Compliance	Are you handling taxes properly?

NIL success shows up in your OVR.

Common NIL Mistakes

Mistake	Why It's a Problem	What to Do Instead
Not saving for taxes	Owe thousands you don't have	Set aside 35% immediately
No business records	Can't prove deductions, audit risk	Track everything from day one
Taking any deal	Damages brand, undervalues you	Be selective, know your worth
No written contracts	Disputes, unpaid work	Get everything in writing
Ignoring agent fees	Unexpected cost, potential scams	Understand fee structure upfront
Spending like it's salary	NIL is irregular	Budget conservatively
Not building for long-term	Miss bigger opportunity	Build audience, not just cash

FAQ

Q: Do I need to pay taxes on NIL income under $600?

A: Yes. The $600 threshold is for when companies must send you a 1099 — it's not a tax-free limit. All income is taxable.

Q: Can my school restrict my NIL activities?

A: Possibly. Some schools and sports associations have policies. Check with your school and association.

Q: Should I get an agent as a high schooler?

A: Usually not necessary unless you have significant deal flow. Many early NIL deals can be handled directly or with parent help.

Q: How do I know if a deal is good?

A: Compare to market rates for similar athletes. Ask: What's the time commitment? What are the deliverables? How does it align with my brand? Is the payment fair for the work?

Q: Can I use NIL money to pay for college?

A: Yes — it's your money. But don't let NIL income affect your financial aid eligibility without planning.

Q: What happens to NIL when I go pro?

A: Professional athletes have separate (and often more complex) endorsement structures. NIL experience helps, but pro deals are different.