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New Oct 2026

Side Hustle Tax Calculator: Salary Plus Side Income

Side profit is taxed on top of your salary or pension, at whatever rate your main income has already reached. This calculator adds it for you, picks the cheaper of the £1,000 trading allowance and your real costs, and shows, for your own figures, what the side-hustle calculators we tested do not work out: when you pay, whether HMRC adds an advance payment toward next year, whether it can come out of your pay instead, and which other thresholds it pushes you over, such as the Child Benefit charge, the £100,000 allowance taper and a student loan.

1. The tax year and where you live
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2. Your main income
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3. Your side income
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4. Anything else
Student loan (tick every plan you repay, or none)

Not sure which plan you are on? Sign in to your student loan account to check. Self Assessment collects the extra repayment your side profit causes. This calculator takes no student loan repayment when your main income is a pension.

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Two people owe the same £1,000 on a side income but pay it differentlyAn employee on a £45,000 salary pays the £1,000 once, by 31 January 2027, because PAYE already covered more than 80% of their tax, and they could have it taken through their tax code instead. A pensioner on a £15,000 pension pays £1,500 by 31 January 2027, the bill plus a £500 payment on account toward the next year, and another £500 by 31 July 2027.Who gets the big first January bill, and who does notSame £5,000 side profit, same £1,000 of extra tax. First year, 2025/26 rules, rest of UK.Employee, £45,000 salary31 Jan: £1,000Pensioner, £15,000 pension31 Jan: £1,50031 Jul: £50031 January31 JulyPAYE already paid most of the employee's tax, so nothing is due in advance.Source: gov.uk (payments on account, through your tax code) · UKFT side income calculatorukfinancetools.co.uk
Two people with the same £5,000 of side profit and the same £1,000 of extra tax. The employee pays it once. The pensioner pays half as much again in January as an advance toward the next year, then the rest in July, because so little of their tax was already taken at source.

When you pay: 31 January, payments on account, or your tax code

The side-hustle calculators we tested work out how much, not when, for your figures. The harder question is when, because the first bill is where people get caught out. Your tax for the year is due by 31 January after it ends. On top of that, HMRC may ask for Advance payments toward next year's Self Assessment bill, due if the tax not taken at source was £1,000 or more and at least a fifth of your tax. Two payments, 31 January and 31 July, each half of it, so the first January can be 150% of it.: two advance payments toward next year, each half of this year's Income Tax and Class 4 not taken through PAYE (a student loan repayment is left out), due on 31 January and 31 July.

Whether they start depends on two tests. Payments on account do not apply if the tax still owing after PAYE is under £1,000, or if more than 80% of your Income Tax and Class 4 was already paid at source. In England, Wales or Northern Ireland, with £5,000 of side profit all taxed at the 20% basic rate, an employee earning more than £32,570 and up to £45,270 has already paid over 80% of their tax through PAYE, so no advance is due. Below that salary, with a larger side profit, in Scotland, or where the side profit is taxed at the higher rate, it can be. A pensioner or a lower earner whose main income already uses the personal allowance has had little taken at source, so they are the ones who can get the January bill plus an advance.

There is a third route. If you owe less than £3,000, already pay tax through PAYE, and file online by 30 December (or on paper by 31 October), HMRC collects the bill through your tax code instead, spread over 12 months of the tax year that starts after you file (2027 to 2028 for a 2025/26 return). It does this automatically unless you ask it not to on the return. Tax collected that way is also treated as taken at source, so it does not start payments on account. It is not available if the extra would be more than the tax you normally pay, which is why the pensioner in the figure cannot use it.

Source: GOV.UK payments on account, GOV.UK pay through your tax code and HMRC manual SALF303. For the payment mechanics in depth, see your Self Assessment tax bill explained.

National Insurance: what you are billed, and what you owe

Side profit pays Class 4 National Insurance: National Insurance paid by the self-employed on their profits, on top of Income Tax. For 2026/27 it is 6% on profits between £12,570 and £50,270, and 2% above that. on its own, not added to your salary: 6% on profit between £12,570 and £50,270, and 2% above that. A side profit under £12,570 pays none at all, whatever your salary is.

For a larger side business there is a twist no calculator we tested shows. If your job already paid you up to the upper earnings limit, the annual maximum caps your Class 4 so that, in effect, the side profit pays 2% rather than 6%. But the regulation makes you liable "in the first instance" for the full amount, so your Self Assessment bill charges Class 4 at 6% and you claim the excess back after the tax year ends. This calculator shows both figures when they differ.

Over State Pension age at the start of the tax year? Then you pay no Class 4 at all, only Income Tax. Source: Social Security (Contributions) Regulations 2001, regulation 100 and regulation 91.

What your side income can tip you over

The extra tax is the number everyone asks for. The thresholds the side income crosses can cost more, and its own tax figure does not show them. The calculator flags each one it sees in your figures:

  • The higher rate. Profit above £50,270 of total income is taxed at 40%, or above the Scottish higher-rate threshold at 42%.
  • The High Income Child Benefit Charge: A tax charge that claws back Child Benefit once one partner's adjusted net income passes £60,000. It is 1% of the benefit for every £200 above £60,000, so the benefit is fully withdrawn at £80,000.. If you or your partner get Child Benefit, it starts at £60,000 of Your total taxable income for the year, less grossed-up pension contributions and Gift Aid donations. It is the figure that decides the personal-allowance taper, the childcare thresholds and the High Income Child Benefit Charge. and takes all of it by £80,000. With side income you pay it through Self Assessment.
  • The personal allowance taper. Above £100,000 you lose £1 of allowance for every £2, an effective 60% on that slice (67.5% in Scotland). See the 60% tax trap.
  • A student loan. Self Assessment takes a repayment on your combined income and deducts what PAYE already took, so the side profit costs 9% of the part above your plan threshold (6% for a Postgraduate Loan).
  • Making Tax Digital for Income Tax: HMRC's shift to digital tax: since April 2026, sole traders and landlords above the qualifying-income threshold must keep digital records and send quarterly updates, as well as the annual tax return.. It uses income before costs from self-employment and property, not profit and not your salary. Over £30,000 in 2025/26 means quarterly digital updates from 6 April 2027, and over £20,000 in 2026/27 means from 6 April 2028.

Your State Pension record

Compulsory Class 2 National Insurance ended in April 2024. In 2026/27 a side profit of £7,105 or more counts as Class 2 paid, so the year qualifies at no cost. Below that you can pay voluntary Class 2 at £3.65 a week. But if your job pays at least the lower earnings limit in each pay period through the year (£6,708 a year in 2026/27), the year already counts as a A tax year in which you paid or were credited with enough National Insurance for it to count toward your State Pension. You typically need 35 qualifying years for the full new State Pension., and voluntary Class 2 buys you nothing. The 2025/26 figures are a little lower, and the calculator uses the right ones for the year you choose and tells you which of these is you.

Planned from April 2029: Self Assessment tax through your pay

At Budget 2025 the government announced that from April 2029, people who file Self Assessment and also have PAYE income will pay toward their Self Assessment bill through their tax code during the year, where they have enough PAYE income to do so. It does not change how much tax you pay, only when. HMRC consulted on how to deliver it from 23 June 2026. Until then, HMRC uses your tax code only if you meet the conditions above and do not opt out. Source: HMRC timely payments factsheet.

What this calculator assumes

  • One side trade and one salary or pension, with PAYE having taxed the main income correctly.
  • The first year of the side income, so no payments on account were already made toward it.
  • Adjusted net income is your main income plus the side profit. Pension contributions, Gift Aid, savings, dividends and rent are not included.
  • Class 1 for the annual maximum is worked out on your yearly pay. Class 1 is really charged pay period by pay period, so uneven pay can change it.
  • One student loan plan, and no student loan repayment when your main income is a pension. A loss is reported, but relief against other income is not modelled.
  • A £1,000 tax-free allowance for casual or self-employed income. You can earn up to £1,000 before declaring, or deduct the flat £1,000 instead of your actual expenses - not both. and actual expenses are compared on the bill they produce. You can only claim one of them.

If you are only deciding whether you need to tell HMRC at all, or a platform has reported your sales, the side income and £1,000 allowance guide answers that first. For a full-time sole trader without a salary, use the self-employed tax calculator. For what counts as a cost, see allowable expenses. This is an estimate, not tax advice.

Source: ITTOIA 2005 Part 6A (trading allowance), GOV.UK self-employed National Insurance rates, GOV.UK student loan repayments, GOV.UK Income Tax rates and allowances.

Frequently Asked Questions

How much tax will I pay on my side hustle if I already have a job?

Your side profit is added on top of your salary, so it is taxed at the rate your salary has already reached. In England, Wales and Northern Ireland that is the 20% basic rate while your total stays under £50,270, and the 40% higher rate above it. Scotland has its own bands. Class 4 National Insurance is separate and works on the side profit alone, so a side profit under £12,570 pays none. Put your own figures in the calculator above for your exact bill.

Is the £1,000 trading allowance based on income or profit?

Income before costs. If you sell £1,500 of goods that cost you £800, your profit is £700 but your income is over £1,000, so the allowance no longer covers it automatically and you need to tell HMRC. You can then deduct the £1,000 allowance or your £800 of real costs, whichever leaves less tax. Here the allowance wins, leaving £500 to tax.

Should I claim the trading allowance or my expenses?

Whichever gives the lower bill, and you cannot have both. If your real costs are under £1,000 and under your income, the allowance always leaves the lower taxable profit. If they are higher, your expenses do. The allowance cannot create a loss, so if your costs are more than your income, the expenses method is the one that can show it. The calculator works out both and names the cheaper one.

Why is my first Self Assessment bill so big?

Payments on account. If the tax still owing after PAYE is £1,000 or more, and 80% or less of your Income Tax and Class 4 was paid at source, HMRC adds an advance payment toward next year, so the first 31 January can be the bill plus half as much again, with the second half by 31 July. If PAYE already paid more than 80% of your tax, there is no advance to pay, and the calculator checks both tests on your own figures.

Can HMRC take the tax from my wages instead?

Yes, if you owe less than £3,000, already pay tax through PAYE, and file online by 30 December or on paper by 31 October. HMRC then collects it through your tax code over 12 months of the tax year that starts after you file, automatically unless you ask it not to. From April 2029 the government plans to make in-year collection through PAYE the normal route for people with both kinds of income.

I am retired. Does the same apply?

For Income Tax, yes: the side profit is added to your pension income. But if you were over State Pension age at the start of the tax year you pay no Class 4 National Insurance. Pensioners are also more likely to face payments on account, because a pension often has little tax taken at source compared with the side income.