Sole trader · second income · trading allowance
Side hustle tax calculator
Selling on Vinted, eBay or Etsy, freelancing in the evenings, or renting out your tools? Find out whether your side income crosses the £1,000 trading allowance and means you must register for Self Assessment — and see exactly how much tax and National Insurance you'll owe on top of your salary. Nothing is sent anywhere; it runs in your browser.
Your side income for 2026/27
Use the totals for the tax year (6 April 2026 to 5 April 2027). "Income" means everything you took, before any costs — that's the figure HMRC's £1,000 test looks at.
The £1,000 trading allowance, in plain English
Everyone gets a £1,000 tax-free trading allowance each year for casual and self-employed income — selling online, freelancing, babysitting, gardening, hiring out equipment. It's tested on your gross income, before you take off any costs.
- Gross side income £1,000 or lessNo tax, usually no need to tell HMRC
- Gross side income over £1,000Register for Self Assessment
Allowance or expenses — whichever helps most
Once you're over £1,000 you can either deduct your actual expenses or knock off the flat £1,000 allowance instead — you can't do both. If your costs are under £1,000, the allowance wins; if they're more, claim the real figure. This calculator picks the better of the two for you automatically.
How your side income is taxed
A side hustle doesn't get its own tax-free allowance beyond the £1,000 — the profit sits on top of your salary or main income, so it's taxed at your highest rate. If your job already uses up the 20% band, the side profit is taxed at 40%.
- Income tax on the profit20% / 40% / 45%
- Class 4 National Insurance (profit over £12,570 only)6% then 2%
- Class 2 National InsuranceNot payable
Class 4 NI is charged on the trading profit itself, so a small side hustle usually pays none — it only bites once the profit passes £12,570. Your salary is dealt with separately through PAYE.
Common questions
Do I need to tell HMRC about my side hustle?
If your gross trading income for the year is £1,000 or less, you generally don't need to tell HMRC or file a return — that's the trading allowance giving you "full relief". Once you go over £1,000 you must register for Self Assessment and declare it. A few situations mean you should register even under £1,000, such as wanting to pay voluntary Class 2 NI or claim certain benefits.
When do I have to register for Self Assessment?
By 5 October in the tax year after the one you went over £1,000. So if your side income first tops £1,000 in the 2026/27 tax year, you must register by 5 October 2027, then file your first return by 31 January 2028. Registering late can mean penalties, so don't leave it.
Does selling on Vinted, eBay or Etsy count?
Selling your own unwanted personal things usually isn't taxable at all — it's not trading. But if you buy or make things to sell, or sell regularly for profit, that's trading and the £1,000 allowance applies. Online platforms now report seller information to HMRC, so it's worth checking where you stand.
Is the £1,000 before or after expenses?
Before. The £1,000 test looks at your gross income — everything you took in, with nothing deducted. Only once you're over the line and working out the tax do expenses (or the £1,000 allowance) come off.
How much tax will I actually pay on it?
Your side profit is added on top of your salary, so it's taxed at your marginal rate — 20% for a basic-rate taxpayer, 40% if it pushes you into the higher band. On top of that, Class 4 National Insurance of 6% applies to any profit above £12,570. The calculator above works out your own figure from your salary and side income.
Do I pay National Insurance on a side hustle?
Only Class 4, and only on trading profit above £12,570 (6%, then 2% above £50,270). Class 2 NI is no longer payable. Most small side hustles fall under £12,570 of profit and so pay no National Insurance at all — just income tax.
More free tools
Once it's more than pocket money, get the whole picture
The moment your side hustle crosses £1,000 you're in Self Assessment — and the tax you owe depends on your whole year, not just the side gig. Our Self Assessment Tax Estimator does it end to end, so you can see the bill before it arrives and set aside the right amount each month.
- Self Assessment Tax Estimator 2026/27 — income tax, Class 4 NI, payments on account and a monthly set-aside, from your profit, expenses and salary.
- Freelancer Invoice Tracker & Log — paid, outstanding and overdue at a glance, with a chase list, for when the side hustle gets real.
- Freelance Day-Rate & Profit Calculator — the day rate you need to hit your take-home.
- Rental Property ROI & Yield Calculator — the real after-Section-24 return on a let.
Excel and Google Sheets. Working formulas, not just formatting. Built and checked by us, with AI assistance, and every calculation verified.
Get the Tax Estimator — £9 →£9 on its own, or all four tools for £19, with a 14-day money-back guarantee.