WeberDev.com -> PHP Manual -> Adding watermarks to images using alpha channels

Example #1 Adding watermarks to images using alpha channels

 <?php
// Load the stamp and the photo to apply the watermark to
$stamp = imagecreatefrompng('stamp.png');
$im = imagecreatefromjpeg('photo.jpeg');

// Set the margins for the stamp and get the height/width of the stamp image
$marge_right = 10;
$marge_bottom = 10;
$sx = imagesx($stamp);
$sy = imagesy($stamp);

// Copy the stamp image onto our photo using the margin offsets and the photo 
// width to calculate positioning of the stamp. 
imagecopy($im, $stamp, imagesx($im) - $sx - $marge_right, imagesy($im) - $sy - $marge_bottom, 0, 0, imagesx($stamp), imagesy($stamp));

// Output and free memory
header('Content-type: image/png');
imagepng($im);
imagedestroy($im);
?>

This example is a common way to add watermarks and stamps to photos and copyrighted images. Note that the presence of an alpha channel in the stamp image as the text is anti-aliased. This is preserved during copying.