Reviewed by Mustafa Bilgic
Founder, WebCalculator
Tax rates are for the 2026/27 year as published by HMRC. The £1,000 trading allowance is a statutory provision under ITTOIA 2005. Not financial advice.
The side hustle tax calculator works out how much extra tax you owe on self-employed income alongside your PAYE job for 2026/27. Enter your salary and side hustle earnings below to see the combined tax bill, whether the £1,000 trading allowance applies, and your total take-home from both income streams.
Combined PAYE and side hustle
Your side hustle profit is added on top of your employment income. Because your Personal Allowance (£12,570) is usually used by your main job, most of the side profit is taxed at your marginal rate — 20% basic, 40% higher, or 45% additional. The first £1,000 of trading income is covered by the trading allowance and is tax-free.
| Salary | Side hustle | Taxable profit | Extra tax |
|---|---|---|---|
| £25,000 | £3,000 | £2,000 | £400 |
| £30,000 | £5,000 | £4,000 | £800 |
| £40,000 | £8,000 | £7,000 | £1,400 |
| £48,000 | £10,000 | £9,000 | £2,508 |
The £48,000 + £10,000 row shows a jump because part of the side profit crosses the higher-rate threshold at £50,270, pushing that portion to 40%.
If your costs are under £1,000, the trading allowance is better — you deduct £1,000 from gross income with no receipts needed. If costs are over £1,000, claim actual expenses instead. You cannot use both. Common deductible expenses include equipment, software subscriptions, advertising, stock, and a proportion of home utility costs if you work from home.
For a broader tax picture, the income tax calculator covers employment income, and the two jobs tax calculator handles dual-PAYE scenarios.
Yes, if your side hustle profit exceeds £1,000 in a tax year. The first £1,000 is covered by the trading allowance and is tax-free. Above that, your profit is added to your employment income and taxed at your marginal rate — 20% basic, 40% higher or 45% additional for 2026/27.
The trading allowance lets you earn up to £1,000 a year from self-employment or casual trading without paying tax or filing a Self Assessment return. If your gross income exceeds £1,000 you can either deduct the £1,000 allowance instead of actual expenses, or deduct your real expenses — whichever gives you a lower taxable profit.
If your trading income is above £1,000 you must register for Self Assessment with HMRC and file a tax return. You can register online at GOV.UK. The deadline to register is 5 October after the end of the tax year in which you started.
If your self-employed profits are £12,570 or more in 2026/27 you pay Class 4 NI at 6% on profits between £12,570 and £50,270, and 2% above that. Class 2 NI of £3.45 a week is due if profits exceed £12,570. Most side hustlers with a PAYE job do not reach this threshold on the side income alone.
With the £1,000 trading allowance your taxable side profit is £4,000. Added to your £30,000 salary your total income is £34,000, still within the basic-rate band. The extra tax is £4,000 at 20% = £800. No Class 4 NI because your side profit alone is under £12,570.
No — you must choose one or the other. If your expenses are more than £1,000, claim actual expenses. If your expenses are less than £1,000, use the trading allowance. You cannot combine both.