Side income and tax: what to set aside
Chapter 1 of 5
The idea
The worst part of a good side-hustle year is the tax bill you didn't plan for.
Why it catches people out
Your main job usually takes tax automatically. Side income usually doesn't — you report it yourself and pay later, often in one lump. Because it sits on top of your salary, it can be taxed at your highest rate, plus any social security or national insurance.
Predict first
You're a basic-rate employee and make $6,000 profit from a side hustle. Roughly what should you set aside for tax and national insurance (UK)?
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