Sidehustle tax calculator

Easily calculate how much Income Tax and National Insurance you owe on your earnings if you’re both employed and self-employed with a side hustle.

What does it mean to have a side hustle?

A side hustle is a job or occupation which brings in extra money alongside your full-time job.
If you are employed and have freelance commitments or a business on the side, you are seen as being both employed and self-employed. So you’re likely taxed both through your full-time employer and manually via a tax return.
You will need to submit a tax return for your self-employed income.

How does my self employed or side income play into this?

Your income tax is based on your total income. If you have a side income, it’s everything from your employer plus your profit from your side income. While your employment income is taxed monthly through PAYE, your side income is taxed when you submit your tax return.

Consider someone earning £15,000 from employment and £5,000 from their side income: The income tax bands for 2022 to 2023 are:

• • Their tax allowance is applied (in full) to the first £12,570 of their income, they pay 0% on that.
• • The remaining £2,430 of their income is taxed at 20% in the basic rate band - that’s £486.
• • The £5,000 of side hustle income also falls in the basic rate band and is taxed at 20% - that’s £1,000.
• • Their total income tax is £486 + £1,000 = £1,486.

Do I also need to pay National Insurance?

You will also pay National Insurance Contributions (NICs) if you earn over a certain amount on Etsy. Depending on your profit, you might need to pay Class 2 and Class 4 National Insurance.

For Class 2, your tax is based on the number of weeks you’ve worked on your business.

• • For Class 2, you pay £3.05 a week if you earned more than £6,725 in profits

Class 4 is calculated in the same way as income tax. You pay the following on your profits:

• • Nothing on your first £11,909
• • 10.25% on any profit earned between £9,568 and £50,270
• • 3.25% on any profit earned above £50,270

Do keep in mind that the below numbers are based on the 2022/2023 tax year.

I’ve used the calculator and I would like to submit my tax return!

That’s awesome! You can submit your tax return with Earnr in minutes. All you need to do is download the app here and follow the steps there. If you need any additional help, please feel free to contact one of our friendly team members, either from within the app or via email [email protected]