If you make your own backing track and recording, it's still under copyright of the original song creator and music producer and you technically need permission from the copyright owners to post a video with your cover.
You risk the video being taken down whenever you do a cover song, but many record labels are tolerant of the videos. Many record labels are NOT tolerant of others monetizing the videos, so I'd be careful about using cover versions of popular songs in your videos. Check through YouTube's music policies to see what the current monetization eligibility status is if you cover a song or use a covered version of a song:
https://www.youtube.com/music_policies
Note that the music policies can change at any time and without warning...thus why I say all cover artists risk their videos being taken down.
Most musicians who cover music are not monetizing their covers on YouTube. If you see ads on the video, there is a high chance that the actual record label is the one that has monetized the video, not the YouTuber. The YouTuber usually gets nothing from their cover from the YouTube platform. The only instance where I've seen musicians actually being paid for their covers is with the well-debated "Nintendo Creators Program." I find it fascinating that what is finally a giant relief and first ability for musicians to be paid at least a tiny bit for making a cover for YouTube is so wildly debated and somewhat boycotted by the gaming YouTubers.
However, if the YouTuber has purchased a Mechanical License, they can distribute their covered version of the song fairly easily on platforms like iTunes so long as they pay royalties for every song purchased. It's possible to still earn money from covered music, but unless it's through Nintendo or a partnership of some sort, it's probably not going to be from YouTube monetization.
