Side Hustle Tax Calculator 2026/27: Tax on Extra Income

Work out your side hustle tax

Enter yearly amounts. Add up everything you earn on the side, before expenses.

You keep £2,200 of £2,500 in 2027/28, £300 more than this year.

Your side hustle in 2026/27 and 2027/28
Measure	2026/27	2027/28
Report to HMRC?	Yes, report it	No need to report
Cheaper method	Trading allowance	Allowance covers it
Taxable profit	£1,500	£0
Extra income tax	£300	£0
Class 4 NI	£0	£0
You keep	£1,900 (76%)	£2,200 (88%)

Scotland: 2027/28 is an estimate until the Scottish Budget. It uses the 2026/27 bands, as 2027/28 bands are not set yet.

Assumes you can use the allowance: you cannot if any of this income comes from your employer or a connected business. Income tax and Class 4 only, with the pension treated as taken from your salary before tax. Not included: student loan repayments, the High Income Child Benefit Charge, and HMRC's annual National Insurance maximum, which can reduce Class 4 if you also pay employee NI. The £3,000 allowance is subject to legislation.

Examples: extra tax by salary and side income

Extra income tax on side income with £300 of expenses, for England, Wales and Northern Ireland, no pension.

Extra income tax in 2026/27 and 2027/28 at three salaries and four levels of side income
Side income	Extra tax 2026/27	Extra tax 2027/28	Saving
£30,000 salary
£800	£0	£0	£0
£2,500	£300	£0	£300
£3,000	£400	£0	£400
£5,000	£800	£400	£400
£60,000 salary
£800	£0	£0	£0
£2,500	£600	£0	£600
£3,000	£800	£0	£800
£5,000	£1,600	£800	£800
£110,000 salary
£800	£0	£0	£0
£2,500	£900	£0	£900
£3,000	£1,200	£0	£1,200
£5,000	£2,400	£1,200	£1,200

Who saves the most

The rise takes £2,000 more out of tax, so what it is worth depends on your rate. You get the full amount if your side income is £3,000 or more and your expenses are £1,000 or less:

Basic rate: up to £400 of income tax a year (on a £30,000 salary).
Higher rate: up to £800 of income tax a year (on a £60,000 salary).
Additional rate: up to £900 of income tax a year (on a £130,000 salary).

The saving is largest between £100,000 and £125,140, where every extra £2 also costs you £1 of Personal Allowance: £1,200 on a £110,000 salary. Scottish rates differ, so use the calculator if you live in Scotland.

What counts and what doesn't

Counts: selling things you made, including for a hobby, or bought to resell; services such as tutoring, dog walking, gardening, cleaning and delivering food; freelance gigs; creating online content; hiring out equipment. Add them together: the limit covers all of them combined.
Usually isn't trading: selling your own unwanted belongings. HMRC says you probably do not have to pay income tax on them, though an item sold for more than £6,000 may bring Capital Gains Tax.
Rules out the allowance: any income from your employer or your spouse's or civil partner's employer, from a company you or someone connected to you owns or controls, or from a partnership you or someone connected to you is in. If you have any of this, you cannot use the allowance that tax year.
Property income: this has its own separate £1,000 allowance. The Budget did not list any change to it, so it stays at £1,000.

Allowance or expenses?

Above the limit you choose one: deduct the trading allowance, or deduct your actual expenses. You cannot do both, so take whichever is larger. The calculator picks for you.

Say you earn £6,000 on the side in 2027/28 with £4,000 of costs, on a £30,000 salary. The £3,000 allowance leaves £3,000 of profit and £600 of extra tax. Your expenses leave £2,000 of profit and £400 of extra tax, so expenses win by £200. Keep the receipts.

Do I need to register for Self Assessment?

If your side income is £1,000 or less before expenses (£3,000 from 6 April 2027), no for that income, unless HMRC has sent you a notice to file a return. Keep a record of what you earned either way.

Above it, register by 5 October after the end of the tax year: by 5 October 2027 for 2026/27. See every Self Assessment deadline.

You must also register, even under the limit, if you want to claim a loss, pay voluntary Class 2 National Insurance, or use this income for Tax-Free Childcare or Maternity Allowance. Class 4 is covered in how self-employed National Insurance works.

Side hustles and Making Tax Digital

Making Tax Digital for Income Tax counts your gross self-employment and property income, before expenses: over £30,000 in 2025/26 means from 6 April 2027, and over £20,000 in 2026/27 means from 6 April 2028. Wages do not count, and it is the income before expenses that matters, not your profit. A side hustle would need to be well above the trading allowance to be caught. Check your date with the Making Tax Digital checker.

Side hustle tax: frequently asked questions

Do I pay tax on a side hustle?

Only above the trading allowance. Side income up to £1,000 before expenses is tax-free in 2026/27, and up to £3,000 from 6 April 2027. Above that you pay income tax on your profit, on top of your salary. On a £30,000 salary, £5,000 of side income with £300 of expenses costs £800 in extra tax in 2026/27 and £400 in 2027/28.

What is the trading allowance?

A tax exemption on trading and miscellaneous income, such as self-employment, casual services and hiring out equipment. If your gross income from these is within it, you pay no tax on it and usually do not need to tell HMRC. If it is above, you can deduct the allowance instead of your actual expenses, but not both.

Is the side hustle allowance £3,000 now?

No. It is £1,000 until 5 April 2027. The £3,000 limit starts on 6 April 2027, for the 2027/28 tax year, and is subject to Finance Bill 2026-27 becoming law. Anything you earn before then is tested against £1,000.

Does the £3,000 include expenses?

Yes, in the sense that the limit is on your income before expenses, not your profit. Sell £4,000 of goods that cost you £1,500 and your profit is £2,500, but your income is over £3,000, so you must report it. You can then deduct either the £3,000 allowance or the £1,500 of expenses, whichever is larger.

Do I pay National Insurance on a side hustle?

Only if your side profit is above £12,570. Class 4 National Insurance is 6% on profit between £12,570 and £50,270 and 2% above that. Your salary does not use up the £12,570: Class 4 looks at self-employed profit alone. Employee National Insurance on your salary carries on as normal.

Does Vinted or eBay selling count?

Selling your own unwanted clothes and belongings usually does not: HMRC says you probably do not have to pay income tax on them, however many items you sell, though an item sold for more than £6,000 may bring Capital Gains Tax. Buying things to sell at a profit, or making things to sell, is probably trading and counts towards the allowance. Platforms may report what sellers receive to HMRC.

Do I need to tell HMRC?

Not for this income if it is £1,000 or less before expenses (£3,000 from 6 April 2027), unless HMRC has sent you a notice to file a return. Above that, register for Self Assessment by 5 October after the end of the tax year. You must also register if you want to claim a loss, pay voluntary Class 2 National Insurance, or use this income for Tax-Free Childcare or Maternity Allowance.

See your full breakdown

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