Side hustle tax calculator (UK 2026/27)
Enter what your side business brings in, your costs and your other income. You'll see the tax to set aside and whether you need to register.
How it works
- Your profit is income minus costs, or income minus the £1,000 trading allowance, whichever is lower. You can't use both.
- Income Tax is the extra tax on that profit on top of your other income: 20% up to £50,270 in total, 40% above, with the £12,570 Personal Allowance used first.
- Class 4 National Insurance is 6% on profits between £12,570 and £50,270, and 2% above. Class 2 is no longer paid if profits are £7,105 or more; below that you can choose to pay £3.65 a week.
- If income from self-employment is over £1,000, you'll normally need to register for Self Assessment by 5 October after the tax year ends.
It works for any home business: crafts, reselling, baking, online tutoring, cleaning, dog walking, pet sitting, virtual assistant work and more.
Worked examples
1. Dog walker: £3,000 income, £400 costs, £30,000 wages. The allowance gives £2,000, lower than £2,600, so profit is £2,000. Tax £400, no Class 4. Register: yes.
2. Baker with big costs: £6,000 income, £2,500 costs, £48,000 wages. Profit £3,500, taking total income to £51,500: £2,270 at 20% and £1,230 at 40%, so tax is £946. No Class 4 as profit is under £12,570.
3. Online tutor, no other job: £15,000 income, £500 costs, no other income. Profit £14,000. Tax £286, Class 4 NI £85.80, total £371.80.
For a full-time sole trader, try the self-employed tax calculator.
Free: The UK Contractor's Cheat Sheet 2026/27
CIS rates, overtime maths, tax dates, mileage, VAT and late payment, on 2 pages. Keep it on your phone or print it for the van.
Frequently asked questions
Do I need to tell HMRC about a side hustle?
If your trading income is over £1,000 in a tax year, you'll normally need to register for Self Assessment. Up to £1,000 is usually covered by the trading allowance.
Can I claim the trading allowance and expenses?
No, it's one or the other. Use the £1,000 allowance if your costs are less than £1,000; claim actual costs if they're more.
Do I pay National Insurance on a side hustle?
Class 4 NI is only due if your profit is over £12,570: 6% up to £50,270, then 2%. Class 2 isn't paid if profits are £7,105 or more; below that it's voluntary at £3.65 a week.
How much tax will I pay on side income alongside my job?
It's taxed at your top rate: usually 20%, or 40% if your total income is over £50,270. This calculator gives a rough figure.
Sources
- Tax-free allowances on property and trading income – GOV.UK
- Income Tax rates and Personal Allowances – GOV.UK
- Self-employed National Insurance rates – GOV.UK
- Check if you need to send a Self Assessment tax return – GOV.UK
- Register for Self Assessment – GOV.UK
This guide is general information, not legal, tax or financial advice. Rules and rates change, so check the linked GOV.UK pages for the current position.