Analyze your side hustle income, taxes, and true net profit. Calculate effective hourly earnings and whether your side gig is worth your time.
$51/hr after taxes
| Annual Revenue | $24,000 |
| Annual Expenses | $3,600 |
| Annual Profit (before tax) | $20,400 |
| Self-Employment Tax | $2,882 |
| Federal Income Tax | $4,171 |
| State Tax | $1,020 |
| Total Tax | $8,073 |
| Effective Tax Rate | 39.6% |
| Annual Net Profit | $12,327 |
| Monthly Net Profit | $1,027 |
| Annual Hours Worked | 240 hrs |
| Effective Hourly Rate | $51.36/hr |
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Profit = Revenue − Business Expenses
SE Tax = Profit × 92.35% × 15.3%
Fed Tax = (Profit − ½ SE Tax) × Marginal Rate (added to primary income)
Net Profit = Profit − All Taxes
Yes. Any self-employment income over $400 must be reported on Schedule C. You'll receive a 1099-K from platforms if you earn over $600. The IRS expects all income to be reported.
Side gig income is subject to self-employment tax (15.3%) plus federal and state income tax. You pay tax on profit (income minus deductible expenses).
Equipment, software, home office, business portion of phone/internet, mileage, marketing costs, and professional development related to your side gig are deductible.
When your side income consistently replaces 80-100%+ of your salary and has growth trajectory, it may be time. Build 6 months of expenses as a safety net first.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.