Plan the side hustle backwards
Start with what you want the side income to do, such as $1,000 a month toward debt or investing, then work back to the effort it takes. Side income is usually self-employment income, so set aside money for tax: in the US that includes both income tax and roughly 15.3% self-employment tax on net earnings, which is why 25% to 30% is a common set-aside. Platform fees, supplies and mileage come off the top too.
At $30 an hour with 25% for tax and 10% for costs, you keep $19.50 an hour, so $1,000 a month takes about 51 hours, or 12 hours a week.
Picking a side hustle that fits
The best side hustle is usually the one that pays well per hour of your limited spare time. Work that builds on a skill you already have, such as tutoring, design, writing, bookkeeping or a trade, tends to pay more than general gig work, and costs less to start. Earning $30 an hour with 10% in costs and 25% set aside for tax leaves about $20 an hour, so a $1,000 monthly goal takes roughly 49 hours a month, a little over 11 hours a week.
Track hours and costs from the start, including driving, supplies and platform fees, so you know your real hourly rate. If it turns out lower than expected, raising prices or narrowing what you offer often does more than working longer. Directing the money to one clear goal, such as paying off a card or investing, keeps it from disappearing into everyday spending. The freelance rate calculator helps set prices.
Common questions
How many hours do I need to earn $1,000 a month on the side?
At $30 an hour with 10% costs and 25% set aside for tax, about 49 hours a month, or a little over 11 hours a week.
How much tax do I pay on side hustle income?
In the US, income tax plus self-employment tax of about 15.3% on net earnings. Setting aside 25% to 30% is common.
Do I need to pay estimated taxes?
If you expect to owe $1,000 or more for the year, the IRS generally expects quarterly estimated payments.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.