Click onto the "smiley" emoji to show/hide the emojis keyboard

From the Send SMS screen, click on the smiley face next to the message label to activate the emoji keyboard.

Set your cursor where you would like to insert your emoji and then click on the emoji to insert into the message

Adding Emojis will reduce the number of available characters per SMS.

Emojis are Unicode characters and these are larger in bytes and will decrease your SMS character limit from 160 to 70. The cost per SMS will remain

Here is the breakdown:

Number of SMS	GSM Count	Unicode Count
1	160	70
2	306	134
3	459	201
4	612	268
5	765	335
6	918	402
7	1071	469
8	1224	536

For detailed information on character encoding and message length see: 
How many characters can I have in my text message?