This article contains affiliate links. We may earn a commission at no extra cost to you.
Side Hustle Tax Calculator
Enter your W-2 salary and side hustle income to estimate your total tax burden, self-employment tax, and actual take-home from your side gig.
W-2 Salary
Side Hustle
Quarterly Estimated Tax Payments
How Side Hustle Income Is Taxed
When you earn money from a side hustle — freelancing, gig work, selling online, consulting — the IRS treats it as self-employment income. This means you pay two types of tax:
1. Self-Employment Tax (15.3%)
This is the Social Security (12.4%) and Medicare (2.9%) tax that employers normally split with you. As a self-employed person, you pay both halves. The good news: you can deduct half of this tax from your adjusted gross income.
2. Federal Income Tax
Your side hustle profit is added to your W-2 income, so it’s taxed at your marginal tax rate — the rate for the next dollar you earn. This is often higher than your average tax rate.
Reducing Your Tax Bill
- Track all business expenses — home office, equipment, software, mileage, supplies
- Open a Solo 401(k) or SEP-IRA — contribute pre-tax dollars from self-employment income
- Deduct health insurance premiums if you’re self-employed and not covered by an employer plan
- Use accounting software to categorize expenses and generate Schedule C reports
When to Pay
If you expect to owe $1,000+ in taxes, make quarterly estimated payments using Form 1040-ES. Missing these deadlines can result in underpayment penalties.
Want to see your full salary picture? Try our US Salary Calculator for W-2 take-home pay.
Building your emergency fund from side hustle profits? Our Emergency Fund Calculator shows how long it takes.
Related Tools