How is side hustle income taxed in the UK?

Your side hustle profit is added on top of your employment salary and taxed through the same income tax bands (20%, 40%, 45%). Because your salary already uses up the lower bands, your side hustle income is often taxed at a higher rate than you might expect. You also pay Class 4 National Insurance on self-employment profits above £12,570.

What National Insurance do I pay on my side hustle?

You pay Class 4 National Insurance on self-employment profits. For 2026/27 this is 6% on profits between £12,570 and £50,270, and 2% above that. Class 2 NI was effectively abolished from April 2024. Your employer still deducts Class 1 employee NI from your salary separately.

What can I claim as expenses on my side hustle?

You can deduct costs that are wholly and exclusively for your business, including: equipment and tools, business mileage (45p/mile up to 10,000 miles), software and subscriptions, a proportion of your home broadband and phone, marketing costs, accountant fees, and professional insurance. You cannot deduct personal food, everyday clothing, or commuting.

UK Side Hustle Tax Calculator 2026/27

Q: When do I need to register for Self Assessment?

You must register for Self Assessment with HMRC by 5 October following the end of the tax year in which your side hustle income exceeded £1,000. For example, if you started earning in the 2025/26 tax year you must register by 5 October 2026. You can register at gov.uk/log-in-file-self-assessment-tax-return.

Q: What is the £1,000 trading allowance for side hustles?

The trading allowance lets you earn up to £1,000 from self-employment without paying any tax or filing a Self Assessment return. If your income is over £1,000, you can still choose to deduct a flat £1,000 instead of calculating your actual expenses — useful if your real expenses are low or you have few receipts.

Q: When is my side hustle tax bill due?

Your Self Assessment tax return and any tax owed must be submitted and paid by 31 January each year. After your first year, HMRC may also require payments on account — advance payments of 50% of your bill due on 31 January and 31 July. Setting aside money monthly is the best way to avoid a large unexpected bill.

Q: Can I have a side hustle while employed full-time?

Yes. There is no legal restriction on having a side hustle while employed, though you should check your employment contract as some employers restrict outside work in related fields. You simply need to declare your side hustle income through Self Assessment if it exceeds £1,000 per year.

Your employer's PAYE only covers your salary — your side hustle income isn't included. That means you could have an unexpected tax bill if you're not putting money aside. This free calculator works out your full tax picture in seconds.

Works for freelancing, delivery, selling online, tutoring and more
Shows income tax and National Insurance on your side hustle profit
Accounts for your tax code and previous tax years
Tells you how much to save each month so you're never caught short

Your Income

Which tax year are you calculating for?

Employment

Gross Annual Salary

Your total pay before tax and NI

Tax Code

Leave blank for the standard 1257L code

Self-Employment

Gross Income / Turnover

Total income received before any deductions

How do you want to deduct costs?

Actual expenses Deduct my real business costs

£1,000 trading allowance Simple flat deduction

Allowable Expenses

Taxable profit: £0

Dividend Income

Total Income £0

Total Tax Bill £0

Self Assessment Due £0 due 31 Jan

            Save Each Month
            £0
            to cover your bill
          

Full Breakdown

Income & Allowances

Employment salary £0

Self-employment profit £0

Dividend income £0

Total income £0

Personal allowance −£12,570

Dividend allowance −£500

Already Paid via PAYE Employer deducted

Income tax on salary £0

Employee NI (Class 1) £0

Total PAYE paid £0

Self Assessment Due You owe this

Income tax (self-employment) £0

Class 4 NI (self-employment) £0

Dividend tax £0

Total Self Assessment bill £0

Things to know

Payment on account: After your first Self Assessment, HMRC splits the bill into advance payments — 50% due 31 January and 50% due 31 July. Budget for this in year two.
PAYE estimate: Based on your tax code. If HMRC has adjusted it for benefits-in-kind or other income, your actual PAYE figure may differ.
Personal allowance taper: If your total income exceeds £100,000 your personal allowance reduces — the effective tax rate between £100k–£125,140 is 60%.
Scotland: Scottish taxpayers have different income tax rates — this calculator covers England, Wales & Northern Ireland only.
This is an estimate only. Always verify with HMRC or a qualified accountant.

Side hustle tax — common questions

Everything you need to know about paying tax on income outside your main job.

Do I need to pay tax on my side hustle income?

Yes. Any income you earn from a side hustle is taxable in the UK. If your gross self-employment income exceeds £1,000 in a tax year you must register for Self Assessment with HMRC and declare it.

Income under £1,000 is covered by the trading allowance and doesn't need to be declared — but you still need to keep records in case HMRC asks.

When do I need to register for Self Assessment?

You must register with HMRC by 5 October following the end of the tax year in which your side hustle income first exceeded £1,000.

For example, if you started earning in 2025/26, register by 5 October 2026. Late registration can result in a penalty even if you owe no tax.

How is side hustle income taxed?

Your side hustle profit stacks on top of your employment salary. Because your salary already uses up the lower tax bands, your side hustle income is often taxed at a higher rate than you might expect.

For example: if you earn £35,000 from your job and £15,000 from a side hustle, around £12,000 of your side hustle profit will be taxed at 40% rather than 20% — because it pushes you over the higher rate threshold.

What National Insurance do I pay on a side hustle?

You pay Class 4 National Insurance on self-employment profits above £12,570. For 2026/27 this is:

6% on profits between £12,570 and £50,270
2% on profits above £50,270

Class 2 NI was effectively abolished from April 2024, so most side hustlers only pay Class 4. Your employer deducts Class 1 employee NI from your salary separately.

What expenses can I claim on my side hustle?

You can deduct costs that are wholly and exclusively for your business, reducing your taxable profit:

Equipment, tools and tech used for work
Business mileage (45p/mile up to 10,000 miles)
Software, subscriptions and memberships
A proportion of home broadband and phone bills
Marketing — website, ads, business cards
Accountant fees and professional insurance

Keep receipts for everything — HMRC can request evidence up to six years later.

What is the £1,000 trading allowance?

The trading allowance lets you earn up to £1,000 from self-employment tax-free. If your income is under £1,000, you don't need to register or declare it.

If your income is over £1,000, you can still choose to deduct a flat £1,000 instead of calculating actual expenses. This is useful if your business costs are low or you have few receipts. You cannot combine the trading allowance with actual expenses — it's one or the other.

When is my side hustle tax bill due?

Your Self Assessment return and any tax owed must be submitted and paid by 31 January each year (covering the previous April–April tax year).

After your first year, HMRC may also require payments on account — advance payments of 50% of your bill due on 31 January and 31 July. This catches many people off guard in year two, so it's essential to save monthly throughout the year.

Can I have a side hustle while employed full-time?

Yes — there's no legal restriction on having a side hustle while employed full-time. You simply need to declare the income through Self Assessment if it exceeds £1,000 per year.

Check your employment contract, as some employers restrict outside work in directly competing fields. Your employer doesn't need to know about your side hustle unless your contract requires it — HMRC handles your self-employment separately.