The NCAA’s NIL policy allows students to be compensated for the use of their name, image or likeness. This rule means college athletes can receive endorsement deals and partnerships, make money and start branding themselves before their professional career starts. This was not previously allowed prior to 2021, and such activity would have violated NCAA eligibility.

A college athlete can make money by licensing their name, image or likeness. These activities might include personal businesses, social media, promotional appearances, autographs or any other activity. Social media and brand endorsement deals are a the popular revenue source for college athletes.

Athletes are already making thousands of dollars per semester from these endorsements with some athletes making much more.

College athletes can earn various forms of compensation through NIL activities, such as:

- Cash payments for services

- Merchandise (e.g., clothing, equipment, electronics)

- Gift cards

Any net income from NIL activities—including non-cash compensation—is considered taxable income. If a business provides an athlete free products in exchange for an endorsement, it is still taxable income. The athlete is required include the fair market value of those products in their taxable income.

Any net income from NIL activities is considered taxable income. The following are potential taxes a college athlete will have to pay for net income earned from NIL activities:

Self-Employment Tax: The income generated from NIL activities is considered self-employed income. Self-employment tax is a tax consisting of Social Security and Medicare taxes. The self-employment tax rate is 15.3% (the sum of a 12.4% for Social Security and 2.9% for Medicare).

State Tax: Generally, in any state a college athlete earns income from NIL activities, the athlete will owe state income taxes.

Federal Tax: The standard deduction for 2021 is $12,550 for single filers (or $25,100 if married and filing taxes jointly). So the athlete will have to pay federal taxes if they make more than $12,550 if single or more than $25,100 as a married couple. All athletes have to fill out a tax return if they make at least $400 in NIL activities.

The tax deadline is April 15th of the following year. For example, NIL income earned in 2025 will require taxes to be filed around April 15th, 2026. 

Every deal is different, but they are not guaranteed unless you have a contract in writing. Verbal promises are not enforceable, be sure to insist on a written contract that clearly outlines the terms of your NIL deal. Vet your partnerships, whether it be the school collective, the company - are they legitimate?

Often founded by prominent alumni and influential supporters, school-specific collectives pool funds from donors to help create and facilitate NIL opportunities for student-athletes. The collective is independent from the University, but is typically driven by boosters. Some are for profit and some are 501(c)(3) non-profits.