How much tax do I pay on side income?

Side income stacks on top of your salary, so it is taxed at your marginal rate — commonly 22–30% combined federal and state for middle incomes, plus about 14% self-employment tax if it is 1099 work. Many hustles keep only 55–70 cents of each dollar.

Do I pay self-employment tax on gig work?

Yes — gig platforms pay you as a contractor, so you owe both the employee and employer halves of Social Security and Medicare (15.3% on ~92% of profits), partly offset by deductions like the QBI break and business costs.

Is a side hustle worth it financially?

Divide what you actually keep — income minus marginal taxes and costs — by honest hours. If the result beats what your free hour is worth, it pays; if it lands near minimum wage, a raise, overtime or rate increase usually beats it.

Side Income Calculator — What the Hustle Really Pays Per Hour

Where the side dollars go

The hustle, line by line

Real pay at every workload

Your true hourly as the weekly hours change (same monthly income — fewer hours means it pays better). The dot is you. Hover to explore.

Squeezing more out of it

How we calculate

What is included

The tax on side income is computed the honest way: your total tax with the hustle minus your total tax without it — so every extra dollar is taxed at your marginal rate, on top of your salary. With “1099” on, the side part also carries self-employment tax (both Social Security and Medicare halves) and gets the QBI deduction, using the same 2026 engine as our income-tax page. Costs come out after tax.

What is estimated or left out

Single filer, standard deduction (the full tax page handles families). Business deductions beyond your entered costs — mileage, home office — can lower 1099 taxes further; track them. Wear on your car, your gear and your evenings is real even when it never hits a spreadsheet.

The formula, in plain words

extra tax = tax(salary + side income) − tax(salary)
kept = side income − extra tax − costs
real hourly = kept ÷ (hours × 50 weeks)

Common questions

Why is my side income taxed harder than my paycheck?: It is not a special tax — it is stacking. Your salary already filled the low brackets, so every side dollar starts at your top rate; 1099 work adds both halves of Social Security and Medicare on top. That is why $800 on paper can be $500 in the pocket.
Do I have to report cash or app income?: Yes. Apps report to the IRS (1099-K/1099-NEC), and unreported income risks penalties. The good news: reporting unlocks deductions — mileage at 70¢, supplies, fees — which often shrink the tax far below the sticker rate.
When is a hustle not worth it?: When its real hourly falls below what an extra hour is worth to you — rest included. Compare it with overtime at your main job, or with asking for a raise: one negotiation can out-earn years of weekend driving.

Side Income: Worth the Hours?