Side Hustle Tax Calculator

Selling online, freelancing, driving, tutoring — if you earn on the side, some of it goes to HMRC. Put in what you were paid and what it cost you, and this works out the income tax and National Insurance on top of whatever you already earn, and whether the £1,000 trading allowance leaves you better off than claiming your real expenses.

Figures are for the 2026/27 tax year (6 April 2026 to 5 April 2027).

Where do you live?Scotland sets its own income tax bands. National Insurance is the same everywhere in the UK.Employment income (before tax)Your salary. Leave at 0 if the side hustle is your only income.Side hustle turnoverEverything you were paid, BEFORE taking off any costs.Allowable expensesWhat the work actually cost you — stock, materials, fees, mileage.

Some of this income came from my employer, my spouse or civil partner’s employer, a company I or a connected person controls, or a partnership I’m connected to.If any of these apply you cannot use the £1,000 trading allowance at all — not on this income, and not on any other side hustle in the same year.

Trading allowance, or your actual expenses?

You can deduct either the £1,000 trading allowance or your real costs — never both. The allowance only wins when your expenses are under £1,000.

Deduct the £1,000 allowance

£5,000

taxable profit · deducts £1,000

Lower taxable profit — by £500

Deduct your actual expenses

£5,500

taxable profit · deducts £500

Profit before tax

£5,500

turnover minus expenses

Income tax on it

£1,000

at your 20% marginal rate

Class 4 National Insurance

£0

profit is under £12,570

You keep

£4,500

18.2% of your profit goes in tax

Estimate for the 2026/27 tax year (6 April 2026 to 5 April 2027). The next £1 of profit would cost you about 20% in income tax and National Insurance combined. This is a ready reckoner using standard assumptions — you should not use these figures to complete a tax return.

Gross income is over £1,000, so you must register for Self Assessment by 5 October in the tax year after you earned it. The £1,000 test is on GROSS turnover, before expenses — so it can apply even when your profit is tiny, and it counts all your side hustles added together. Check on GOV.UK

This estimate does not include student loan repayments. If you are repaying one, your actual take-home will be LOWER than shown — 9% of income above your plan threshold, or 6% on a Postgraduate Loan. Check on GOV.UK

Profit is under the £7,105 Small Profits Threshold, so this year may not count toward your State Pension. You can pay voluntary Class 2 NI at £3.65 a week to protect the qualifying year — far cheaper than Class 3 at £18.40 a week for the same thing. Check on GOV.UK

What this estimate leaves out

Deliberately not modelled, because each needs details this tool doesn’t ask for: student loan and postgraduate loan repayments, pension contributions and their tax relief, your actual PAYE tax code, savings interest, dividends, rental income, capital gains, the High Income Child Benefit Charge, capital allowances and trading losses.

Class 2 National Insurance is never added to the figures above. On profits at or above £7,105 it is treated as already paid, at no cost, and still counts toward your State Pension. Class 4 — the one you do pay — buys you no State Pension entitlement at all.

The trading allowance is one £1,000 per person, not per side hustle, and it is tested on your combined gross income from all of them. It is also tested before expenses, so you can be required to register for Self Assessment even in a year you barely broke even. Exclusions: paid by your employer, or your spouse or civil partner’s employer; paid by a company you or a connected person controls; paid by a partnership you are a partner in, or connected to a partner in; rent-a-room receipts.

About these figures. A ready reckoner using standard assumptions for the 2026/27 tax year, checked against GOV.UK and HMRC guidance on 2026-08-04. It does not include student loan repayments, pension contributions, your actual PAYE tax code, savings interest, dividends, rental income, capital gains or the High Income Child Benefit Charge — so it is an estimate, not your tax bill, and you should not use these figures to complete a tax return. If you repay a student loan your take-home will be lower than shown. Tax rules change and the treatment of your income depends on your circumstances. For a definitive figure, check your tax code and speak to HMRC or a qualified accountant. You can check whether a financial adviser is regulated on the FCA Register, and free money guidance is available from MoneyHelper.

Important — this is general information, not financial advice. This page covers an FCA-adjacent topic (e.g. pensions, trusts or tax planning) and is provided for education only. It does not account for your personal circumstances and is not a personal recommendation. SSAS, trust and tax decisions can have significant and hard-to-reverse consequences — before acting, get advice from an FCA-authorised adviser, a qualified tax adviser, or a STEP-qualified solicitor. Tax treatment depends on your individual circumstances and may change.

Last reviewed: 4 August 2026