Work out what a side hustle really pays per hour once fees, costs, driving and self-employment tax come out
Most side hustles look better per hour than they are, because the headline rate leaves out the time and costs around the work. Enter what you earn, what you spend and every hour involved, and the calculator above returns your effective hourly rate after self-employment tax.
A gig that pays $500 a month sounds worthwhile until you count the 60 hours and $200 of costs behind it: that is $5 an hour before tax. Compared with a part-time job, overtime at your main job, or simply not doing it, the effective rate is the number that decides whether it is worth your evenings.
Platform and payment-processing fees, supplies and software, phone data, and driving — either the IRS standard mileage rate for the year (it changes annually, so take the current figure from irs.gov) or your actual vehicle costs. Self-employment tax is 15.3% on 92.35% of net earnings once they pass $400 a year; income tax comes on top at your own rate.
Not just the paid minutes. Count travel between jobs, waiting for orders, messaging customers, buying supplies, listing items, admin and bookkeeping. Unpaid time is where most of the difference between advertised and real pay comes from.
Compare the effective rate with your alternatives, then look for the lever: raising prices, cutting the lowest-paying work, reducing driving, or switching to something that uses a skill you can charge more for.
For an investment that pays back over several years, IRR accounts for when each dollar comes back.
See also: Side Hustle Income.
Take revenue, subtract fees, costs and self-employment tax, and divide by every hour spent on it, including travel and admin.
It depends on your alternatives. If extra hours at your job or a part-time role pay more after costs, they are usually the better use of the time.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.