Your annual employment salary before tax
Total annual income from your side hustle
Allowable business expenses for your side hustle
Reg. 07380272 · England & Wales · Est. 2010
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Total Additional Tax
£900.00
Side Hustle Net Income
£3,600.00
Effective Rate
18.0%
Deduction Used
£500.00
Must register as self-employed
Your side hustle income of £5,000.00 exceeds the £1,000 trading allowance. You must register as self-employed with HMRC and file a Self Assessment tax return.
Everything you need to know about paying tax on your side hustle income
Do I need to pay tax on my side hustle?
If your side hustle income is below the £1,000 trading allowance, you do not need to pay tax or register as self-employed. If it exceeds £1,000, you must register with HMRC as self-employed and report the income on a Self Assessment tax return. The additional tax you pay depends on your total income from all sources, as side hustle profits are added on top of your employment income.
What is the £1,000 trading allowance?
The trading allowance is a £1,000 tax-free allowance for individuals with trading or miscellaneous income. If your total side hustle income is £1,000 or less, it is entirely tax-free and you do not need to report it. If your income exceeds £1,000, you can choose to either deduct the £1,000 trading allowance from your gross income or deduct your actual business expenses — whichever gives you a lower taxable profit.
How is side hustle income taxed alongside my salary?
Your side hustle profit is added on top of your employment income for income tax purposes. This means it is taxed at your marginal rate — the rate you pay on your next pound of income. For example, if your salary already uses up your personal allowance and basic rate band, your side hustle profit may be taxed at the higher rate (40%). You also pay Class 4 National Insurance on self-employed profits above the lower profits limit and Class 2 NI if profits exceed the small profits threshold.
What expenses can I claim and when must I file?
You can claim allowable business expenses incurred wholly and exclusively for your side hustle, including materials, advertising, software subscriptions, equipment, and a proportion of home office costs. You must register as self-employed with HMRC by 5 October following the tax year you started. Your Self Assessment tax return must be filed by 31 January (online) or 31 October (paper) following the end of the tax year, with any tax owed due by 31 January.
HMRC-Aligned: This calculator uses official 2025/26 income tax rates, National Insurance thresholds, and the £1,000 trading allowance. Actual liabilities may vary depending on your personal circumstances, other income sources, and any additional reliefs you may be entitled to. Consult HMRC or a qualified accountant for exact figures.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms