Side Hustle Tax Calculator: True Profit After Fees & Taxes

Enter what your side hustle brings in each month, the fees and costs that come out of it, and your day-job salary, filing status and state. The calculator shows your profit, the self-employment, federal and state tax on it, what is left for you, and what that works out to per hour.

For the rules behind these numbers, read Unsaturated Service Business Ideas: 15+ High-Demand Markets With Low Competition You Can Start This Month.

Short answer: a side hustle on top of a W-2 job is taxed twice over: self-employment tax of 15.3% on 92.35% of your profit (only 2.9% once your wages pass the $184,500 Social Security wage base), plus federal income tax at your top bracket on profit minus half of that SE tax and minus the 20% qualified business income deduction. With a $65,000 salary and $18,858 of profit, that comes to about $5,599, or 29.7% of profit, before any state tax.

The calculator is for informational purposes only. Its results are estimates based on the numbers you enter and on the simplifications listed below; your actual tax depends on your full return.

What the calculator includes

The tax math uses the 2026 federal rules in IRS Rev. Proc. 2025-32 and works as an "extra tax" comparison: it figures your federal income tax with the side hustle and without it, and shows the difference.

It assumes your W-2 wages are your only other income, that you take the standard deduction, and that the side business is a sole proprietorship (Schedule C).

How self-employment tax works on side income

Self-employment tax is the Social Security and Medicare tax that an employer would otherwise split with you. On Schedule SE:

1. Multiply net profit by 92.35% to get net earnings from self-employment. Below $400 of net earnings there is no SE tax.
2. Apply 12.4% Social Security tax to net earnings up to the 2026 wage base of $184,500 minus the Social Security wages on your W-2s.
3. Apply 2.9% Medicare tax to all net earnings.
4. Deduct half of the total on Schedule 1. That deduction lowers income tax, not the SE tax itself.

Example with a $65,000 job: $18,858 × 92.35% = $17,415.36. Your wages use $65,000 of the wage base, leaving $119,500, so the whole amount gets both parts: $17,415.36 × 15.3% = $2,664.55. Half of it, $1,332.28, is deductible.

Example with a $190,000 job: your wages already exceed the wage base, so only Medicare applies: $17,415.36 × 2.9% = $505.05. Because wages plus SE earnings pass the $200,000 single threshold, the 0.9% Additional Medicare Tax applies to the $7,415.36 above it: $66.74, reported on Form 8959. The calculator shows that line only when it applies.

How federal income tax is figured

Side profit stacks on top of your salary, so it is taxed at your highest brackets. The calculator subtracts three things before applying the 2026 brackets:

• the standard deduction for your filing status;
• half of your SE tax;
• the qualified business income (QBI) deduction of 20% of profit after half of SE tax.

The QBI deduction is figured with the shared logic of the QBI deduction calculator. It is treated as a non-service business with no employees, which is exact below the 2026 threshold of $201,750 of taxable income ($403,500 joint). Above that, a business with no W-2 wages loses the deduction over a $75,000 range ($150,000 joint), and so does the calculator. From 2026 there is also a $400 minimum deduction if you materially participate and have at least $1,000 of QBI.

Worked example: $65,000 salary, single, Texas, 2026

At 20 hours a week, that is about $12.75 an hour after tax. The calculator's hourly figure always assumes 20 hours a week for 52 weeks.

State income tax

Nine states do not tax wages or business income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Flat-rate states such as Illinois (4.95%), Pennsylvania (3.07%) and Michigan (4.25%) are applied at their rate. For states with graduated brackets the calculator uses the state's top rate, which overstates tax for most people. California's 13.3% top rate, for example, applies only to taxable income above $1 million. Type your own marginal rate from your state return or your state's rate schedule in the optional field for a better estimate. Local income taxes, such as New York City's, are not included.

Deductions that change the result

Mileage

The IRS raised the 2026 business rate in the middle of the year: 72.5 cents a mile for January 1 to June 30 and 76 cents a mile from July 1 to December 31 (IRS standard mileage rates). The calculator applies each rate to half of your annual miles. If your driving is seasonal, multiply your actual miles in each half of the year by the matching rate instead. Commuting to your day job never counts; driving from that job to a client does. Keep a log with date, purpose and miles.

Home office

The space must be used regularly and exclusively for the business. The calculator uses the regular method on rent only and limits the deduction to your profit, because a home office cannot create a loss (the excess carries forward on Form 8829). The simplified method, $5 per square foot up to 300 square feet, is often close for small offices and needs fewer records. The home office deduction calculator compares both methods with utilities and insurance included.

Equipment

Small purchases are usually deductible right away: the de minimis safe harbor lets you expense items costing up to $2,500 each, and §179 or 100% bonus depreciation covers larger equipment. Enter equipment as a business expense for the year you buy it.

Health insurance and retirement

Self-employed health insurance premiums are deductible up to your profit, but not for any month you could join a subsidized plan through your job or your spouse's, which rules it out for most people with a full-time day job. A SEP IRA or the employer side of a solo 401(k) lets you contribute 20% of profit after half of SE tax; the results show that figure for you. Employee deferrals to a solo 401(k) share the $24,500 limit with your workplace 401(k). The solo 401(k) calculator works out the full amount.

Where the "$5,000 more" figure comes from

The results show how much tax $5,000 of extra deductible expenses would save. The calculator reruns your numbers with $5,000 more in expenses, so the figure includes the SE tax, federal tax, QBI and state tax effects together. It is not a list of deductions you are missing.

Quarterly estimated taxes

Taxes on side income are not withheld, so the IRS expects you to pay during the year if you will owe $1,000 or more at filing time after withholding. You avoid the underpayment penalty if what you pay through withholding and estimates covers the smaller of 90% of this year's tax or 100% of last year's (110% if last year's AGI was over $150,000).

2026 due dates: April 15, June 15 and September 15, 2026, and January 15, 2027. The calculator splits the side-hustle tax into four equal payments. Increasing your W-4 withholding at the day job is often easier: withholding counts as paid evenly through the year even if you change it in December. The guide to paying quarterly estimated taxes walks through IRS Direct Pay and Form 1040-ES, and the tax withholding calculator helps size the W-4 change.

1099 forms and record keeping

From 2026, a client has to send you Form 1099-NEC only if it paid you $2,000 or more in the year, and payment apps and marketplaces send Form 1099-K only above $20,000 and 200 transactions (IRS Publication 1099). Income is taxable whether or not you get a form, so track every payout. Keep receipts for costs, your mileage log, and a record of square footage if you claim a home office. The 1099 tax guide for independent contractors covers the forms in more detail.

Hobby or business?

The calculator assumes you are running a business, which means you are trying to make a profit. If the IRS treats an activity as a hobby, you still report all the income, but you cannot deduct any expenses against it. Signs of a business include keeping separate books, changing methods when something loses money, and making a profit in three of five years.

What the calculator does not model

• itemized deductions, other investment income, and credits such as the child tax credit;
• the QBI rules for specified service businesses above the threshold;
• S-corporation or LLC elections (see the S-corp payroll tax calculator);
• state-specific deductions and local income taxes;
• business losses offsetting wages (a loss shows as $0 of tax here).

For a full-return estimate that adds the side income to wages, credits and state disability tax, use the tax calculator alternative and enter the profit as self-employment income.