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.
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.
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:
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.
Class 4 is calculated in the same way as income tax. You pay the following on your profits:
Do keep in mind that the below numbers are based on the 2022/2023 tax year.
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