We used paper mache to make the hat, then painted it. We just looked up some YouTube videos on paper mache hats and just tweaked them to suit our needs (the black bill and the height). The actual Spongebob body we bought, then we got some mid calf socks and painted the lines and wore some black shoes. You see through the hat by the holes in the anchor on the head. We used body paint for the yellow arms, but we suggest a yellow spandex suit.
We won 3rd place in our local costume contest and got $25!