What Type of Income is a Payout from Instagram Reels?
Today, I’m going to talk about what type of income a payout from Instagram Reels is. This feature seems to be making a return for some accounts, so I want to cover how to categorize it—especially if you’ve ever received a bonus from Facebook or Instagram. So, let’s dive in.
I recently saw someone ask in a Facebook group what type of income an Instagram payout counts as. I think that’s because this feature is being reintroduced to select accounts. Occasionally, Instagram (and sometimes Facebook) will offer payments if you hit a certain number of views or create a specific number of Reels within a time period. These payouts can feel kind of random. That being said, it’s understandable that people wonder how to handle them from a bookkeeping standpoint. Even if this feature isn’t currently active for you, it might be in the future—so this is a great time to learn how to track it properly.
Before we talk about where this income should go, let’s quickly define what “categorizing” means in bookkeeping in case you’re unfamiliar with the term. Categorizing is simply the process of grouping similar transactions together in your bookkeeping software or spreadsheet. This helps you get a clear picture of where your money is coming from and where it’s going. For example, common expense categories might include advertising and marketing, travel, events, office expenses, subscriptions, and supplies.
Now, when it comes to categorizing income from Instagram, my general philosophy is to be as specific as possible. Many people doing their own bookkeeping tend to lump all income into one category like “sales” or “services”. Breaking it down more specifically gives you much more helpful insights. For instance, knowing how much revenue came from a specific service or product can help you make more informed decisions about your business.
That said, unless you’re receiving Instagram payouts frequently—like if you’re an influencer who gets paid regularly—this type of income is best categorized as “Other Income” or “Other Revenue.” While I’m usually not a fan of using categories like “other,” “miscellaneous,” or “uncategorized” (because they don’t tell you anything helpful), this is one of those rare instances where it makes sense—if the income is infrequent and not central to your business model.
When you’re running your reports, it’s not very helpful to see a bunch of income categorized as “Other.” You end up having to dig in and figure out what those “other” transactions actually were. That takes time and doesn’t give you a clear picture of your business. If you have multiple types of income lumped into “Other,” it just becomes even more confusing and less useful.
That said, in this case—an occasional Instagram payout—it’s probably only going to happen a few times a year. (Sorry to burst your bubble!) But if you’re someone who receives these payments more frequently, then it might be worth creating a separate income account. You might title this “Instagram Reels Revenue” or “Instagram Payouts,” and categorizing it there for better tracking.
For most of us, though, these payments aren’t common, so it’s okay to simply categorize them as “Other Income.”
Now, if you’re thinking, I have no idea how to create a new account or I’m not even sure I’m categorizing my expenses correctly, then head over to my website and check out some of my programs. We cover all of this inside. Things like how to set things up, how to categorize properly, and how to feel confident with your numbers. If you need guidance, that’s the best place to start.
And with that, this Q&A is a wrap!
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