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Both types are painted on the 2D stage and previewed on the freemode ped. Rageon exports the files. How the result looks in game has not been confirmed yet, so check it on your server.
The preview of a face overlay on the ped is approximate. Judge the final look in game.

Tattoos and patches

1

Choose type, gender, and zone

In New edit, select Tattoo and patch. Set Type to Tattoo or Patch and Gender to M, F, or Both. Then pick a zone: Torso, Head, Left arm, Right arm, Left leg, or Right leg. Each zone shows how many decorations the game has for your choice.
New edit on Tattoo and patch with Type, Gender, Zone, and the New tattoo button

Tattoo on the Torso zone for male peds, with the New tattoo button.

2

Create new or repaint one from the game

Click New tattoo (or New patch) to start a blank 512 × 512 decoration at once. There is no Continue step. Or click a game decoration and click Continue to repaint it.A new decoration belongs to the project’s collection. The Collection strip shows its name once the first one exists.
3

Name the preset

The header shows the preset name. Double-click it to rename. Use letters or numbers, start with a letter, and avoid names that start with hash_. Each name must be unique in the project.
4

Place the art

Add a layer, then with Move and transform (V) click the body on the ped to place it. Shift + wheel rotates, Ctrl + wheel scales, and H mirrors. With the 3D stage focused, or the pointer over it when no control has focus, Q/E rotate 15° and -/= scale. Hold Shift for 1° rotation or finer scaling; arrow keys move the art, with Shift for larger steps. Dragging updates the Position section live: Position X and Y, Scale X and Y, Rotation, and Mirror the art. Values can go beyond 0 to 1, and a negative scale mirrors the art.Copy from takes position, scale, and rotation from a game decoration in the same zone and gender.
Repainting a game decoration replaces its .ytd and has no preset fields.
Both previews the male ped.
For new tattoos and patches, export writes the collection .ytd under stream/ and its XML file under data/. Apply the decoration in game after the ped exists, and again each time the ped is recreated:

Face overlays

Face overlays are repainted per slot and index.
1

Choose the slot and index

In New edit, select Face overlay, then a slot such as Beard. Choose one of its Index … tiles.
2

Choose the Base

Original paints over the game’s overlay. Clean replaces the whole texture: whatever you do not paint stays transparent. You can switch later under Overlay, and undo it.
New edit on Face overlay with the Beard slot, an index tile, and Base set to Original

Beard slot with an index picked and the Base choice.

3

Click Continue and paint

The stage shows the overlay mask, and the ped shows it over the skin. To position artwork on the ped, select an unlocked layer and use Move and transform (V). Clicking or dragging the body places that layer; the rotation, scale, and mirror gestures above also apply.
Editor with the overlay mask, the Overlay section with Preview color, and the ped

The overlay open with Preview color and the ped in 3D.

With Base set to Clean, exporting without layers replaces the original overlay with a transparent texture.
Some slots use a color palette: Beard, Eyebrows, Makeup, and Chest hair use the hair palette, and Blush and Lipstick use the makeup palette. On these slots, paint in gray. The tone picks the position in the palette, and alpha is the coverage. Preview color colors the preview only and does not go into the file; in game, the color comes from the script. On export, the overlay replaces that index’s dictionary. In game, apply it with SetPedHeadOverlay(ped, slot, index, 1.0). In New edit, click New overlay in the Collection strip to create a transparent head tattoo immediately. It follows the tattoo workflow above, rather than adding a new face-overlay index.

Troubleshooting

The preset name needs at least one letter or number. Remove symbols.
Rename the preset so the first character is a letter.
Choose a name that does not start with hash_.
Preset names must be unique in the project. Rename one.
The export needs 512 × 512 art for this decoration. Keep the decoration at its original size.
The game’s list is unavailable. New tattoo and New patch still work.
The ped for the preview was not found. The edit still exports, but you cannot check placement in 3D.