Side Hustle Income Calculator
What Do You Actually Keep?
Side Hustle Tax Reality
Unlike W-2 income where your employer pays half your payroll taxes, side hustle income is subject to the full 15.3% self-employment tax (Social Security 12.4% + Medicare 2.9%) plus your marginal income tax rate. After taxes, you keep roughly 55-70% of your gross side hustle income.
The good news: business expenses are deductible. Home office, equipment, software, mileage, and supplies all reduce your taxable income. Track everything — even small deductions add up.
Maximizing Side Hustle Income
- Track every deduction — Mileage ($0.67/mile in 2024), home office, internet, phone, supplies, software, and professional development are all deductible
- Set aside 25-30% for taxes — Open a separate savings account and immediately transfer 25-30% of every payment to cover quarterly estimated taxes
- Consider an S-Corp election — Once side hustle income exceeds ~$40,000/year, an S-Corp can save thousands in self-employment taxes by paying yourself a reasonable salary
- Use a SEP-IRA or Solo 401(k) — Contribute up to 25% of net self-employment income (up to $69,000/year) to dramatically reduce your tax burden
Frequently Asked Questions
Do I need to pay taxes on side hustle income?
Yes. All side hustle income over $400/year is subject to self-employment tax (15.3%) plus federal and state income tax. You must file quarterly estimated taxes if you expect to owe $1,000+. Track all expenses — they're deductible against your side hustle income.
What are the best side hustles for extra income?
High-earning side hustles include: freelancing your professional skills ($50-$200/hr), tutoring ($30-$80/hr), consulting ($100-$300/hr), content creation (variable), delivery driving ($15-$25/hr), and selling digital products (passive after creation). Choose based on your skills and available time.
How much can I realistically earn from a side hustle?
Most side hustlers earn $500-$2,000/month working 10-20 hours/week. Top earners in freelancing, consulting, or digital products can earn $5,000-$10,000+/month. It takes 3-6 months to build most side hustles to meaningful income.