Side Hustle Profit Tracker
Revenue − expenses − self-employment tax − income tax → real take-home from a side gig.
Result
- Revenue$20,000
- Deductible expenses$3,000
- Net Schedule C income$17,000
- — Self-employment tax —
- SE-tax base (× 92.35%)$15,700
- SS portion (12.4%)$1,947
- Medicare portion (2.9%)$455
- Total SE tax$2,402
- ½ SE-tax deduction$1,201
- QBI 20% deduction (Sec 199A)Subject to phase-out above $241,950 single / $483,900 MFJ in 2025 — not modeled here.$3,160
- — Income tax stacks on top of W-2 —
- Other (W-2) income$80,000
- Federal tax (W-2 only baseline)$8,770
- Federal tax (W-2 + side hustle)$11,551
- Marginal federal tax on side hustle$2,781
- State tax (5.0% flat approximation)$790
- — Bottom line —
- Total tax on side hustle$5,973
- Take-home$11,027
- Effective tax rate on side hustle35.13%
- Effective hourly rate$22 / hr (500 hrs/yr)
Step-by-step
- Net SE income = revenue − expenses = $20,000 − $3,000 = $17,000.
- SE tax = $17,000 × 0.9235 × (0.124 + 0.029) = $2,402.
- QBI deduction (20% of qualified business income) ≈ $3,160.
- Marginal federal tax on side hustle = full fed tax (W-2 + SE) − fed tax (W-2 only) = $2,781.
- Take-home = net SE − (SE tax + fed margin + state) = $11,027.
- Hourly = $11,027 / 500 = $22.
How to use this calculator
- Estimate annual revenue and ALL deductible expenses (software, mileage at IRS 67¢/mi 2024, home office, supplies, professional development).
- Enter W-2 income — sets the marginal bracket the side hustle stacks into.
- Pick filing status and state — flat-state approximation is rough but good enough for planning.
- Hours/year sets the effective-hourly-rate output — the single most useful number.
About this calculator
A side hustle nets less than the headline revenue number — by a lot. The math: revenue minus deductible business expenses gives Schedule C net income, which is subject to 15.3% self-employment tax (Social Security 12.4% up to the SS wage base ~$184k for 2026 plus Medicare 2.9% on everything). Half of the SE tax is deductible against income tax. The Section 199A QBI deduction shaves another 20% off taxable side-hustle income for most sole proprietors below phase-out thresholds. Then federal income tax stacks on top of your W-2 day-job income at your MARGINAL bracket (not your effective rate) — a 22% W-2 earner doing $20k of side hustle pays 22% federal on most of it, not 10-22% averaged. Plus state. Empirical effective total tax rate on side-hustle income for a typical $80k-W-2 earner: ~30-40%. The "hourly equivalent" line is the realistic number to evaluate whether the side hustle is worth your time vs other ways of spending those hours.