Steps

Open images — Open your background, then drag the subject image onto the background canvas (it becomes a new layer on top).

Position & scale — Select the subject layer → Ctrl/Cmd + T (Free Transform). Hold Shift while dragging a corner to keep proportions (CS6 behavior). Press Enter to confirm.

Create a Layer Mask — With the subject layer selected, click the Add layer mask button (rectangle with a circle) at the bottom of the Layers panel. A white mask reveals the whole layer.

Hide unwanted areas — Select the Brush Tool (B). Choose a soft round brush, set Opacity/Flow (start ~40–60%). Set foreground to Black and paint on the mask to hide parts of the subject and blend edges. Paint with White to restore.

Smooth transitions — For gradual fades use the Gradient Tool on the mask (black→white). Drag across the mask area to create smooth blends.

Refine tricky edges (hair/fur) — Before masking, use Quick Selection (W) to select the subject, then Select > Refine Edge…. Tweak Radius, Smooth, and Feather, then Output To: Layer Mask.

Mask shortcuts & tricks

Alt/Option + click mask thumbnail = view mask.

Shift + click mask thumbnail = enable/disable mask.

Ctrl/Cmd + I = invert mask.

Click the link icon between layer & mask to move them independently.

Finalize — When satisfied, you can keep the mask (non-destructive) or right-click the mask → Apply Layer Mask (destructive).