Side Income Tax Calculator
Estimate US taxes on freelance or gig income including the 15.3% self-employment tax, federal income tax, and deductible expenses.
Find your net profit.
Changing your currency elsewhere on the site will not affect this page.
Side income from freelancing, gig work, rentals, or a small business comes with different tax obligations than W-2 employment. Understanding the tax impact helps you set the right rates, save appropriately, and avoid a surprise tax bill in April.
Net Side Income formula:
Net = Gross Side Income − Business Expenses − Self-Employment Tax − Income Tax on Side Income
Self-Employment Tax (SE tax):
SE Tax = Net Self-Employment Income × 0.9235 × 0.153
The 0.9235 factor accounts for the employer-half deduction. The 15.3% rate = 12.4% Social Security + 2.9% Medicare.
What each variable means:
- Gross Side Income: all money received before expenses
- Business Expenses: deductible costs (equipment, software, home office, mileage at the current IRS standard rate, which is reset every year, internet, professional fees)
- Net Self-Employment Income: gross income minus expenses
- SE Tax: both the employee and employer halves of FICA, since you are your own employer
- Income Tax: depends on your total taxable income and filing status; side income is taxed at your marginal rate
Worked example: Side income: $20,000/year. Deductible expenses: $3,000. Combined federal + state marginal rate: 30%.
Net SE income = $20,000 − $3,000 = $17,000 SE Tax = $17,000 × 0.9235 × 0.153 = $17,000 × 0.1413 = $2,402 SE Deduction (50% of SE tax): $1,201 Taxable side income = $17,000 − $1,201 = $15,799 Income Tax = $15,799 × 0.30 = $4,740 Total taxes = $2,402 + $4,740 = $7,142 Net take-home = $17,000 − $7,142 = $9,858
On the $20,000 you actually invoiced, that is 49 cents in your pocket per dollar billed. Against the $17,000 of net profit it is 58 cents. Quote the first number to yourself when you are setting rates.
Quarterly estimated taxes: The IRS requires quarterly payments if you expect to owe $1,000+ in self-employment tax. Due dates: April 15, June 15, September 15, January 15.
Tax-saving strategies:
- Maximize SEP-IRA contributions (up to 25% of net self-employment income, subject to the annual defined-contribution cap, which the IRS raises most years)
- Deduct the home office (must be used exclusively and regularly for business)
- Deduct health insurance premiums if self-employed
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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