Side Business Tax Calculator

Calculate total taxes on side business income combined with your W-2 job.

By Konstantin Iakovlev · Updated April 2026 · Source: IRS — Gig Economy Tax Center

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Total Tax on Side Income

$6,265.06

Effective Rate

31.3%

Quarterly Payment

$1,566.26

Tax Breakdown

Net self-employment income$20,000.00
Self-employment tax (15.3%)$2,825.91
Additional federal income tax$3,439.15
Total tax on side income$6,265.06
Quarterly estimated payment$1,566.26

Use the Side Business Tax Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Side income comes with a tax bill that the IRS expects you to anticipate, not discover in April. Estimating what you owe as the money comes in lets you set funds aside, plan around the obligation, and skip the unpleasant surprise that catches many gig workers off guard.

The estimate follows a simplified path: it accounts for self-employment tax covering Social Security and Medicare, then applies your estimated income tax bracket to what's left after common business expenses are deducted. That result is a useful starting figure for planning, but it stands in for, rather than replaces, advice from a tax professional who knows your full situation.

Careful records throughout the year are what make any of this reliable, so log income and deductible expenses as they happen instead of reconstructing them later. Self-employment tax is the line people most often shortchange, and underestimating it is exactly how unexpected bills and penalties show up at filing time.

Example: Freelance Graphic Designer

  1. 1 Let's say you earned $15,000 from freelance graphic design work this year, and you had $2,000 in deductible business expenses (software subscriptions, website hosting).
  2. 2 The calculator would first determine your net earnings ($15,000 - $2,000 = $13,000). Then, it would estimate your self-employment tax (around 15.3% on 92.35% of net earnings) and your income tax based on your estimated tax bracket (e.g., 12% or 22%) on the remaining taxable income.
  3. 3 Based on these estimates, the calculator might project a total tax liability of approximately $2,500 - $3,500, depending on your other income and deductions.
  4. 4 This estimate indicates you should aim to set aside around $200-$300 per month for taxes. This proactive approach helps you manage your finances effectively and avoid a large tax bill at year-end.

Source: IRS — Gig Economy Tax Center · Last updated: April 2026

Frequently Asked Questions

How much tax do I pay on side business income?
Side business income is taxed at your marginal income tax rate (10-37%) plus 15.3% self-employment tax. If your W-2 job puts you in the 22% bracket, your side income faces roughly 37% in combined taxes.
Do I need to pay quarterly taxes on side income?
Yes, if you expect to owe $1,000 or more in taxes for the year from side income. Quarterly estimated payments are due April 15, June 15, September 15, and January 15.
What can I deduct from side business income?
Common deductions include home office expenses, equipment, supplies, mileage, software subscriptions, professional development, and health insurance premiums. The 20% qualified business income (QBI) deduction may also apply.

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