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Self-Employment Tax Calculator
Self-employment and income tax on 1099 or side-gig profit, and how much to set aside.
Pay tool · Extra income
Side Hustle Tax Calculator: How Much of Your Extra Income You Keep
Gig, freelance or a second job on top of your salary: see the tax at your real bracket, how much to set aside, whether to pay quarterly or raise your withholding, and what you really earn per hour.
Your job and your side income
After tax and expenses
You keep $10,427
of your side income this year
Estimate · 2026 tax rules
- Kept per $1 of profit
- 70¢
- Set aside for taxes
- 30% ($4,573)
- Federal income tax
- $2,453
- Social Security and Medicare
- $2,119
- State income tax
- $0
- After-tax hourly pay
- $20.85 an hour
- Extra withholding per paycheck, rest of 2026
- $915
- Quarterly payments for a full year
- $1,144 each
- Your salary puts you in the 22% federal bracket before any side income, so the side income is taxed from there up.
- Self-employment tax is $2,119: both halves of Social Security and Medicare on 92.35% of your profit.
- The 20% qualified business income deduction ($2,788) lowers your federal income tax.
- About $4,573 of federal tax isn't withheld. For 2026, the easiest fix is $915 more withheld from each of your 5 remaining main-job paychecks (W-4 Step 4(c)), which counts as paid evenly through the year; or pay estimated tax by January 15, 2027. For a full year of this income, quarterly payments would be about $1,144 each.
- Pick a state to include state income tax.
- After tax and expenses you earn about $20.85 an hour for every $30.00 you bill.
How this was calculated
We work out your 2026 federal return with and without the side income, so your salary sets the bracket and every credit and deduction phases correctly. Gig work: profit = income − expenses − business miles (72.5¢ a mile for the first half of the year and 76¢ for the second); self-employment tax on 92.35% of profit, with the Social Security part limited to what's left of the $184,500 wage base after your salary; half of it is deductible; the 20% qualified business income deduction; and the tips deduction for listed jobs, up to your gig profit. Second job: 7.65% Social Security and Medicare (any over-withholding across two employers comes back as a credit), state payroll programs, and income tax at your combined bracket, compared with what that job withholds on its own.
State income tax is your state's tax on the extra income (local taxes not included). Payment suggestions cover federal tax only (state tax is paid to your state): extra withholding spreads the federal tax not withheld over your remaining 2026 paychecks, and quarterly payments are shown for a full year of this income when it's $1,000 or more. The mileage split assumes half your miles were driven before July. States that don't allow the half-self-employment-tax deduction (like Pennsylvania and New Jersey) or start from federal taxable income aren't modelled exactly.
Calculation pay.side-hustle v1.0.0.
Quick answer: how much of a side hustle do you keep?
Most people with a full-time job in the 12% to 24% brackets keep about 65 to 80 cents of each dollar of side profit after federal tax, before state tax. On a $70,000 salary, $15,000 of gig profit leaves you $10,427: $2,453 of federal income tax and $2,119 of self-employment tax. At 10 hours a week for 50 weeks, that's $20.85 an hour for every $30.00 earned.
| Salary | Your bracket | Gig: you keep | Gig: set aside | Second job: you keep |
|---|---|---|---|---|
| $40,000 | 12% | $7,695 | 23% | $8,035 |
| $70,000 | 22% | $6,951 | 30% | $7,035 |
| $120,000 | 22% | $6,839 | 32% | $6,871 |
| $200,000 | 24% | $7,755 | 22% | $7,365 |
About a third of Americans have a side hustle, earning an average of $1,242 a month in LendingTree's 2026 survey (LendingTree); Bankrate's 2025 survey found a median of just $200 a month (Bankrate).
Why your salary decides the tax on side income
Side income is stacked on top of your salary, so it's taxed at your highest bracket, not your average rate. Your salary has usually already used up the standard deduction and the lower brackets. That's why generic "set aside 25%" advice can be off: a teacher in the 12% bracket and a manager in the 24% bracket keep very different shares of the same gig. The calculator works out your 2026 return with and without the side income, so every phase-out and deduction is counted.
Self-employment tax and the Social Security cap
Gig and freelance profit owes self-employment tax of 15.3% on 92.35% of profit (about 14.1% of profit) once your net earnings from it (92.35% of profit) reach $400, because you pay both the employee and employer halves of Social Security and Medicare (IRS). Half of it is deductible. Your salary counts first toward the $184,500 Social Security wage base for 2026 (SSA), so if your salary is above that, your side profit owes only the 2.9% Medicare part (Schedule SE instructions). On a $200,000 salary, $15,000 of gig profit owes just $402 of self-employment tax, plus 0.9% Additional Medicare.
Deductions that cut the tax
- Business expenses: supplies, equipment, software, platform and phone fees, and the business share of your internet.
- Mileage: 72.5¢ a mile from January to June 2026 and 76¢ from July (IRS; IRB 2026-29). Driving to your main job doesn't count.
- Home office: $5 per square foot of space used only for the business, up to 300 square feet (IRS).
- Qualified business income deduction: 20% of your gig profit (after half of the self-employment tax) comes off your taxable income, with limits at high incomes (26 U.S.C. §199A).
- Tips: from 2025 to 2028, tips earned in listed jobs (including rideshare drivers, delivery workers and digital content creators) are deductible up to $25,000, limited to your profit from that work, and phase out above $150,000 of modified AGI ($300,000 joint). The tips must be voluntary and reported to you on a 1099-NEC, 1099-MISC or 1099-K, you need a Social Security number, married couples must file jointly, and tips from a specified service business (like consulting or health) don't qualify (IRS; IRS; Federal Register). It cuts income tax, not self-employment tax: a delivery driver on a $50,000 salary with $6,000 of tips in $20,000 of gig income keeps $12,682 instead of $11,962.
A second W-2 job: the withholding gap
A second employer withholds tax as if it were your only job, so it applies the standard deduction and low brackets again. With a $70,000 salary and a $20,000 second job, the second job withholds about $390 of federal income tax, but the job adds $4,400, so you'd owe about $4,010 at tax time. Fix it by checking the "multiple jobs" box (Step 2) on both W-4s, using the IRS estimator, or adding an extra amount in Step 4(c) (Form W-4; IRS estimator). If your two jobs together pay more than $184,500, both withhold Social Security in full, and you get the excess back as a credit on your return.
How much to set aside
Set aside the share shown in the calculator: usually 20% to 37% of gig profit for federal tax, depending on your bracket, plus your state's rate. Put it in a separate savings account each time you're paid. By state, on a $70,000 salary with $15,000 of gig profit:
| State | State tax | You keep | Set aside |
|---|---|---|---|
| California | $1,187 | $9,240 | 38% |
| New York | $753 | $9,674 | 36% |
| Illinois | $690 | $9,737 | 35% |
| Pennsylvania | $428 | $9,999 | 33% |
| North Carolina | $556 | $9,871 | 34% |
| Texas | $0 | $10,427 | 30% |
Quarterly payments or more withholding?
Platforms generally don't withhold tax from gig income. If you'll owe $1,000 or more in federal tax after withholding, the IRS expects estimated payments, due April 15, June 15 and September 15, 2026 and January 15, 2027 (Form 1040-ES; IRS). You avoid an underpayment penalty if your withholding and payments cover 90% of this year's tax or 100% of last year's (110% if your 2025 adjusted gross income was over $150,000) (Form 1040-ES; IRS). If your income came late in the year, the annualized-income method on Form 2210 can lower the penalty.
You can also skip the January 15 payment if you file your 2026 return by February 1, 2027 and pay the rest then. The quarterly tax calculator works out exact safe-harbor payments, and the W-4 calculator the Step 4(c) amount.
1099 forms and reporting rules for 2026
- All of it is taxable, whether or not you get a form (IRS).
- Form 1099-NEC: clients send one if they pay you $2,000 or more for payments made in 2026, up from $600 (IRS).
- Form 1099-K: payment apps and marketplaces must send one when you receive over $20,000 in more than 200 transactions, after the 2025 law restored that threshold, though they may send one for less (IRS).
- Self-employment tax applies once net earnings reach $400.
- Hobby or business? Income from a hobby is taxable, but hobby expenses aren't deductible (made permanent by the 2025 law). The IRS looks at whether you run it like a business and expect a profit (IRS; 26 U.S.C. §67).
State taxes on side income
Most states tax side income like other income, starting from federal adjusted gross income, so the QBI and tips deductions usually don't reduce state tax. Nine states have no income tax on wages. Some cities and counties add local income tax, which isn't included here.
Is it worth it? After-tax hourly pay and side effects
Divide what you keep by the hours you put in, including unpaid time like driving between orders or chasing clients. A $30.00-an-hour gig on a $70,000 salary works out to about $20.85 after federal tax. Extra income can also:
- Reduce Marketplace health subsidies, now that the 400%-of-poverty cliff is back for 2026 (healthinsurance.org).
- Raise income-driven student loan payments, which are based on your adjusted gross income. See the student loan calculator.
- Change the Earned Income Tax Credit if you get it: more income raises it at low earnings and reduces it above that (the calculator counts this).
On the plus side, self-employment income lets you open a Solo 401(k) or SEP-IRA, and if your salary is under the wage base it adds to your Social Security earnings record.
Common questions
How much tax do I pay on a side hustle?
Your top federal bracket on the profit after half the self-employment tax and the 20% QBI deduction come off, plus about 14.1% self-employment tax (less if your salary is over the Social Security wage base), plus state tax. Most people set aside 20% to 37% of profit for federal tax, plus state tax.
Do I have to pay taxes on side income under $600 (or $2,000)?
Yes. Those are thresholds for the forms clients send, not for the tax. Self-employment tax starts at $400 of net earnings, and income tax applies to any amount.
Is a second job taxed more?
No, but it's often under-withheld, because each employer withholds as if it's your only job. Check "multiple jobs" on your W-4s.
Can I deduct my car for DoorDash or Uber?
Yes, the business miles (72.5¢ a mile through June 2026, 76¢ from July) or actual costs, but not commuting to a regular job. Keep a mileage log.
Do I need to pay quarterly taxes on a side hustle?
Only if you'll owe $1,000 or more in federal tax beyond your withholding, and even then not if your withholding already covers 100% of last year's tax (110% at higher incomes). Raising your main job's withholding is usually simpler.
Sources
- Gig economy tax center — Internal Revenue Service. Accessed October 15, 2026.
- The Working Families Tax Cuts: what gig economy workers should know — Internal Revenue Service. Accessed October 15, 2026.
- Self-employment tax (Social Security and Medicare taxes) — Internal Revenue Service. Accessed October 15, 2026.
- Instructions for Schedule SE — Internal Revenue Service. Accessed October 15, 2026.
- Contribution and benefit base — Social Security Administration. Accessed October 15, 2026.
- Estimated taxes — Internal Revenue Service. Accessed October 15, 2026.
- Form 1040-ES (2026), Estimated Tax for Individuals — Internal Revenue Service. Accessed October 15, 2026.
- Topic no. 306, Penalty for underpayment of estimated tax — Internal Revenue Service. Accessed October 15, 2026.
- Instructions for Form 2210 — Internal Revenue Service. Accessed October 15, 2026.
- Form W-4 (2026) — Internal Revenue Service. Accessed October 15, 2026.
- Tax Withholding Estimator — Internal Revenue Service. Accessed October 15, 2026.
- Form 1099-MISC and independent contractors (FAQ) — Internal Revenue Service. Accessed October 15, 2026.
- Understanding your Form 1099-K — Internal Revenue Service. Accessed October 15, 2026.
- How to tell the difference between a hobby and a business — Internal Revenue Service. Accessed October 15, 2026.
- IRS sets 2026 business standard mileage rate — Internal Revenue Service. Accessed October 15, 2026.
- Simplified option for home office deduction — Internal Revenue Service. Accessed October 15, 2026.
- 26 U.S. Code § 199A — Legal Information Institute, Cornell Law School. Accessed October 15, 2026.
- Working Families Tax Cuts: individuals and workers — Internal Revenue Service. Accessed October 15, 2026.
- Internal Revenue Bulletin 2026-29 (Announcement 2026-11, mileage from July 1, 2026) — Internal Revenue Service. Accessed October 15, 2026.
- 26 U.S. Code § 67 — Legal Information Institute, Cornell Law School. Accessed October 15, 2026.
- Occupations that customarily and regularly received tips (final rule) — Federal Register. Accessed October 15, 2026.
- Side hustle income survey (2026) — LendingTree. Accessed October 15, 2026. Survey of 2,049 U.S. consumers, March 2026.
- Side hustles survey (2025) — Bankrate. Accessed October 15, 2026. Survey of 2,616 adults, June 2025.
- Marketplace enrollees face return of the subsidy cliff — healthinsurance.org. Accessed October 15, 2026. Secondary source.
Federal figures use 2026 tax rules for one household; the state table uses each state's 2026 rules without local taxes. Research checked October 15, 2026. This is an estimate, not tax advice.