Side Hustle Tax Calculator
Calculate tax and National Insurance on your UK side hustle income for 2026/27
Used to calculate your Income Tax band
National Insurance Options
Class 2 is voluntary if profits are below £12,570 but helps build state pension entitlement
Taxable Profit
£14,000.00
Income Tax Due
£6,286.00
National Insurance
£265.20
Total Tax & NI
£6,551.20
Tax Breakdown
Where Your Money Goes
- value
Your Take-Home Pay
£7,448.80
After tax and National Insurance from your side hustle
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Important Notes
- Register for Self Assessment by 5th October after the tax year
- File tax return by 31st January and pay any tax owed
- Keep records of all income and expenses for 5+ years
- Trading allowance is automatic - opt out to claim actual expenses
Why side hustle tax catches people off guard
Because side hustle income sits on top of your employment income, it's taxed at your marginal rate, meaning if your day job already uses up your basic-rate band, every pound from your side hustle could be taxed at 40% rather than 20%. This surprises many people who assume side income is taxed independently at a lower starting rate.
You also pay Class 4 National Insurance on self-employed profits above £12,570 (6% up to £50,270, then 2% above), in addition to Income Tax, so total deductions can easily reach 26-46% of profit depending on your overall income.
Getting your side hustle tax right
Register for Self Assessment
You must register with HMRC by 5 October following the tax year in which your side hustle income exceeded £1,000, leaving it too late can trigger a late-registration penalty.
Choose allowance or expenses, not both
The £1,000 trading allowance is quick and simple, but if your genuine business expenses exceed £1,000, deducting actual costs will usually leave you with a lower tax bill.
Set aside tax as you earn
Since side hustle income isn't taxed at source like a salary, put aside roughly 20-30% of profit as you go so the January tax bill isn't a shock.
Keep the two income streams separate on your return
Employment income (from your P60/P45) and self-employment income are reported in different sections of Self Assessment, your accountant or software will combine them correctly to calculate your overall tax band.
Worked example: £45,000 job plus a side hustle
Take someone earning £45,000 in England. Their taxable job income is £32,430 after the £12,570 Personal Allowance, which leaves £5,270 of the £37,700 basic-rate band. If the side hustle makes £4,000 profit, all of it sits in the basic-rate band and costs £800 in tax. No Class 4 NI is due because the profit is below £12,570.
If the side hustle makes £10,000 profit instead, the first £5,270 is taxed at 20% (£1,054) and the remaining £4,730 at 40% (£1,892). The total is £2,946, an effective rate of about 29%. Figures are for 2026/27 England rates and ignore other income and reliefs.
Frequently asked questions
Do I need to tell HMRC about a small side hustle?
If your gross trading income is £1,000 or less in a tax year, the trading allowance usually covers it and you do not need to report it. Above £1,000 you generally need to register for Self Assessment.
What counts as an allowable expense?
Costs wholly and exclusively for the business, such as materials, software, a share of phone costs or travel for work. Keep receipts for every claim.
When is my tax bill due?
Self Assessment returns are due by 31 January after the tax year ends, and the tax is normally due on the same date. Larger bills may also need payments on account.
Does selling my own belongings count as a side hustle?
Generally no. Selling personal items for less than you paid is not trading. Regularly buying to resell for profit usually is.
Related tools
Frequently Asked Questions
What is the trading allowance?
The trading allowance is £1,000 per tax year. If your side hustle income is below this, you do not need to report it to HMRC.
Do I need to file Self Assessment?
You need to file if your side hustle income exceeds £1,000 (trading allowance) or if you have other untaxed income over £2,500.
What expenses can I deduct?
You can deduct allowable expenses like equipment, travel, marketing, home office costs, and professional services directly related to your side hustle.
How much National Insurance do I pay?
Class 2 NI is £3.45/week if profits exceed £12,570. Class 4 NI is 6% on profits between £12,570-£50,270, and 2% above that (2026/27 rates).
Key Terms Explained
Plain-English definitions of the financial terms used in this calculator.
- Gross vs Net Income
- Gross income is your pay before deductions; net (take-home) pay is what lands in your bank after income tax, National Insurance, pension contributions and student loan repayments.
- Personal Allowance
- The amount of income you can earn each tax year before paying income tax, £12,570 for most people in the UK. It is reduced by £1 for every £2 earned above £100,000.
- National Insurance (NI)
- A UK payroll contribution that funds the State Pension and some benefits. Employees pay Class 1 NI on earnings above the primary threshold, deducted automatically through PAYE.
- Tax Band
- The income ranges taxed at different rates. In England, Wales and NI: basic rate 20%, higher rate 40% (above £50,270) and additional rate 45% (above £125,140). Scotland uses its own bands.
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Not Financial Advice: This calculator is for informational and educational purposes only. Results are estimates and do not constitute financial advice, recommendations, or regulated advice. We are not authorised or regulated by the Financial Conduct Authority (FCA). Always consult a qualified financial adviser for personalised advice. Tax treatment depends on your individual circumstances and may change. Tax laws and rates may change. Past performance does not guarantee future results.
