reddit is not an image hosting site.You therefore need to host the content outside of reddit, and then submit a link to that content. You'll notice that most images are hosted on imgur.com, but any image hosting service can be used.
If you would like to use imgur (not endorsed or affiliated with reddit) here is a guide provided by /u/somerandomredditor:
How to Submit a picture to reddit using imgur:
This guide is going to assume you already have a picture in mind of course.
- Go to Imgur.com. On the right, you should see "Upload images" and under that two buttons; "Computer" and "Web" (If you're not on Imgurs homepage, but an album or a picture page (that's not a direct link) you can also click the arrow in the upper left hand corner of the screen.)
- If your image is on your computer, click the button marked "Computer". Once you do, a window showing the standard save/upload screen should come up. Navigate to where your picture is located by clicking the folders/tabs on the left. Once you've found it, double click it or click it once then hit the button marked "save".
- If the image is hosted elsewhere on the internet, go to where it's hosted, right click the image, select "copy image location", saving the url to your clipboard. Go back to your imgur tab/window, click the "Web" button, and a new window should pop up. On the upper right of it, paste your URL.
- You can drag and drop your images on to the imgur screen, for both computer and internet uploads, to do so click the "Arrow" in the upper left hand corner of imgurs screen first.
- After whichever method you use to select the file, you should have a new window with a thumbnail of your image on the bottom. Click the button "Start Upload" to start your upload. A screen should come up showing the progress, and you'll automatically be directed to your images new home. Now, either copy the URL in the Address bar, or the "Direct Link" (on the right) URL, and head on back over to reddit.
- If you wish to submit the image to a subreddit as a link post, go to that subreddit, and click the button on the sidebar labeled "Submit a Link". Put in your title, and paste in the URL you just copied, and click "Submit"
- If you wish to put the link to the picture in a self post or a comment, the formatting for it is
[What you want your link to say](http://www.YourURLhere.com).