Side Hustle Income Calculator

Calculate your net annual and monthly income from a side hustle after expenses and taxes.

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Enter your values and click Calculate

This calculator estimates the real take-home income from a side hustle, freelance project, or part-time business after accounting for business expenses and self-employment taxes. Many people focus on gross hourly rate without realizing how much is lost to operating expenses and taxes. As a self-employed individual, you pay both the employee and employer portions of Social Security and Medicare taxes (the self-employment tax, currently 15.3% on the first $160,200 of net earnings), plus federal and state income tax on your net self-employment income. The expense percentage accounts for tools, software, equipment, marketing, professional development, and other costs of running your side business. The net effective hourly rate after tax is often significantly lower than the quoted hourly rate — this calculator reveals the true hourly value of your side work so you can make informed pricing decisions.

How It Works

Gross annual revenue = hourly rate × hours per week × working weeks per year. Business expenses = gross revenue × (expense % ÷ 100). Income after expenses = gross − expenses. Tax amount = after-expenses income × (tax rate ÷ 100). Net annual income = after-expenses income − taxes. Net monthly income = net annual ÷ 12. Effective hourly rate = net annual ÷ total hours worked. The tax rate input should include both self-employment tax (15.3% on the first $160,200 of net self-employment income as of 2024) and federal/state income tax. For someone in the 22% federal bracket with a state rate of 5%, a combined rate of 30–35% is typical after accounting for the deduction for half of self-employment tax. Use Schedule SE to calculate exact self-employment tax liability.

Examples

Freelance Developer
$50/hr, 10 hrs/week, 48 weeks, 20% expenses, 30% total tax rate.
Result: Gross $24,000. Net annual ~$13,440. Net monthly ~$1,120. Effective rate ~$28/hr.
Part-Time Consultant
$100/hr, 5 hrs/week, 45 weeks, 15% expenses, 35% tax.
Result: Gross $22,500. Net annual ~$12,431. Net monthly ~$1,036. Effective rate ~$55/hr.
Weekend Gig Worker
$25/hr delivery or services, 20 hrs/week, 50 weeks, 10% expenses, 25% tax.
Result: Gross $25,000. Net annual ~$16,875. Net monthly ~$1,406. Effective rate ~$16.88/hr.

Frequently Asked Questions

What is the self-employment tax and how does it affect freelancers?
When you work as a W-2 employee, your employer pays half (7.65%) of your Social Security and Medicare taxes and you pay the other half. As a self-employed person, you pay both halves — a total of 15.3% on net self-employment income (up to $160,200 for Social Security in 2024; Medicare has no income cap). This self-employment tax is in addition to federal and state income taxes. However, you can deduct half of the self-employment tax when calculating your adjusted gross income, which partially offsets the burden. Budget for a combined tax rate of 25–40% for most US freelancers.
What business expenses can I deduct?
The IRS allows deductions for 'ordinary and necessary' business expenses. Common side hustle deductions include: a home office deduction (if you use a dedicated space exclusively for work), business use of your vehicle (standard mileage rate or actual expenses), software subscriptions, equipment and tools, professional development and courses, business insurance, marketing and advertising, professional services (accountant, lawyer), and business-related travel. Keep receipts and records. Using a separate business bank account and credit card makes expense tracking much easier. Consult a tax professional to maximize legitimate deductions.
Do I need to make quarterly estimated tax payments?
Yes — if you expect to owe $1,000 or more in federal taxes from self-employment income, the IRS requires quarterly estimated tax payments (due April 15, June 15, September 15, and January 15). Failing to pay estimated taxes results in an underpayment penalty. A common rule of thumb is to set aside 25–30% of every payment you receive and make quarterly payments. Many freelancers open a separate savings account specifically for taxes to avoid accidentally spending money that belongs to the IRS.
How do I set my hourly rate to hit an income target?
Work backwards: decide your net income target, then apply taxes in reverse. If you want $2,000/month net after 30% taxes, you need $2,857/month after expenses. If expenses are 20% of revenue, you need $3,571/month in gross revenue. Divide by your monthly hours (hours/week × weeks/month) to get the required hourly rate. Also factor in non-billable time — marketing, admin, accounting, and communication take real hours that don't appear in your billable rate. A common rule of thumb is that freelancers should charge 2–3× their desired equivalent hourly salary to account for taxes, expenses, and non-billable time.

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