A step-by-step guide on how to make transparent text in Photoshop. As you've no doubt noticed, there's no transparent option in the color palette.
Here’s how to make that transparent text punched-out look in Photoshop. As you’ve no doubt already noticed, there’s no “transparent” color in the color palette, so it’s not self-evident on how to apply transparent text. But perhaps you want to add a label to a picture of a jar of honey. Or maybe you just want to use an image as a texture for your font. Here’s how you can do it.
And voila, you have punched out text.
That, of course, is just a most basic example.
And there’s no reason you have to use a panel overlay. You can hide the panel overlay (or delete it, for that matter) and apply layer effects to the text layer to make the characters stand out.
This, for example, is using the Inner Shadow effect (right click on text layer in layer panel, choose Inner Shadow and change the settings to get the look you want):
And this one uses Bevel and Emboss (right click on text layer in layer panel, choose Bevel and Emboss and change the settings to get the look you want):