How much of your side hustle do you keep?
Tell us your job's salary and what you earn on the side, and we'll show the tax and National Insurance you'd pay on it for 2026/27.
Your side hustle adds£4,200a year to your take-home
- Extra a month
- £350
- Set aside for tax and NI
- £800
- Taken from each £1 of profit
- 20p
| Money coming in | £5,000.00 |
|---|---|
| Trading allowance (instead of expenses) | −£1,000.00 |
| Taxable profit | £4,000.00 |
| Extra income tax | −£800.00 |
| Class 4 National Insurance | £0.00 |
You'd normally pay the extra £800 through Self Assessment, not through your payslip. HMRC may ask for part of next year's bill in advance (payments on account), on 31 January and 31 July.
Your job on its own takes home £2,693 a month. With the side hustle averaged in, that's about £3,043 a month.
How a side hustle is taxed
Your side profit is added to your job's pay and taxed on top, so it's taxed at your top rate. On £40,000, that's 20% until your total income reaches the higher-rate band, then 40%. A £20,000 side income on a £40,000 job would leave you with £14,068.20, because part of it falls into the 40% band.
You also pay Class 4 National Insurance on profits over £12,570: 6% up to £50,270 and 2% above. It's worked out on your side profit alone, not added to your job's. Class 2 is no longer a charge for most people: with profits of £7,105 or more it's treated as paid.
The tax isn't taken from your payslip. You report your profit through Self Assessment, pay the bill by 31 January, and may also pay in advance (payments on account) on 31 January and 31 July if your bill is over £1,000 and less than 80% of your tax was already collected through your pay.
Common questions
How much tax do I pay on a side hustle on top of my job?
Your side profit is added to your pay and taxed at your highest rate. On a £40,000 job, £5,000 of side income with no expenses means £4,000 of taxable profit after the £1,000 trading allowance, which costs £800.00 in income tax and £0.00 in Class 4 National Insurance in 2026/27. You keep £4,200.00.
Do I need to declare a side hustle under £1,000?
Generally no. The trading allowance lets you earn up to £1,000 a year of trading income tax-free, and you usually don't need to tell HMRC if you stay at or below it. You should still keep records, and some exceptions apply.
What is Class 4 National Insurance?
It's the National Insurance you pay on self-employed profits. In 2026/27 it's 6% on profits between £12,570 and £50,270, and 2% on profits above that. It's worked out on your side profit alone, separately from the National Insurance on your job.
Should I use the trading allowance or claim my expenses?
You can't use both on the same income. The calculator picks whichever deducts more: the £1,000 allowance, or your actual expenses. If your expenses are bigger than the allowance, claiming expenses usually leaves you better off.
Rates checked 17 October 2026. Sources:Self-employed National Insurance rates,trading allowance andpayments on account (all GOV.UK). We treat the trading allowance as reducing your taxable profit for both income tax and Class 4, in line with HMRC's description that both are charged on taxable profits. If your profit is near a threshold, check with HMRC or an accountant.See how we work these out.