Side Hustle Tax Calculator UK
See how much tax you owe on your side hustle income alongside your main job. Find out the effective tax rate and what you actually keep.
£
£
£
Frequently asked questions
Do I need to pay tax on my side hustle?▾
If your side hustle income exceeds £1,000 per year (the trading allowance), you must declare it to HMRC. You pay income tax on the profit (income minus expenses) at your marginal rate, which depends on your total income.
What is the £1,000 trading allowance?▾
The trading allowance lets you earn up to £1,000 from self-employment or casual income tax-free. If you earn less than £1,000, you do not need to declare it. If you earn more, you can either deduct the £1,000 allowance OR claim actual expenses — whichever is more beneficial.
Do I need to register as self-employed?▾
If your side hustle income exceeds £1,000 per year, you must register with HMRC as self-employed and file a Self Assessment tax return. You must register by 5 October following the tax year in which you started.
What expenses can I claim?▾
You can claim expenses that are wholly and exclusively for your side hustle: materials, equipment, software, phone costs (business portion), mileage, home office costs (simplified or actual), marketing, and professional insurance.
Do I pay National Insurance on side hustle income?▾
If your self-employment profit exceeds £12,570, you pay Class 2 NI (£3.45/week) and Class 4 NI (6% on profits between £12,570-£50,270, 2% above £50,270). Note: your employment already covers Class 1 NI separately.
What tax rate applies to my side hustle?▾
Your side hustle profit is added on top of your employment salary. If your salary already uses your personal allowance and basic rate band, your side income may be taxed at 40% from the first pound.
When do I file my tax return?▾
Self Assessment tax returns for the tax year (6 April to 5 April) must be filed by 31 January of the following year for online filing, or 31 October for paper filing. Payment is also due by 31 January.
Do I need to make payments on account?▾
If your tax bill is over £1,000, HMRC may require payments on account — two advance payments towards next year's bill, each 50% of the previous year's liability. This is due 31 January and 31 July.
Can my employer find out about my side hustle?▾
HMRC does not tell your employer about your side hustle. However, if HMRC collects tax via your PAYE tax code, your employer will see a changed code (though not the reason). You can ask HMRC to collect via Self Assessment instead.
Should I set up a limited company?▾
For most side hustles, sole trader status is simpler and cheaper. A limited company may save tax if profits exceed £30,000-£40,000, but involves more admin (Companies House filings, accounts, corporation tax). Consider professional advice.