On a £35,000 salary, a £4,000 side income costs £600 in tax and National Insurance — you keep £3,400, an effective 15% on the side income itself.
| Gross side income | £4,000 |
| Trading allowance | −£1,000 |
| Taxable profit | £3,000 |
| Income tax (stacked on your salary) | £600.00 |
| Class 4 National Insurance | £0.00 |
| Total to HMRC | £600.00 |
| You keep | £3,400.00 |
Assumes employment income of £35,000 through PAYE with a standard tax code, the trading allowance claimed, and no other income. Class 2 National Insurance is not payable; below £7,105 of profit you can pay voluntarily (£3.65/week) to protect your NI record. Scottish income tax bands differ — these figures are for England, Wales and Northern Ireland.
Side income is taxed on top of your salary, so the salary decides the rate. This is the table most side-hustle tax articles won't print.
| Salary | Tax + NI | You keep | Effective rate |
|---|---|---|---|
| £15,000 | £600 | £3,400 | 15% |
| £20,000 | £600 | £3,400 | 15% |
| £25,000 | £600 | £3,400 | 15% |
| £30,000 | £600 | £3,400 | 15% |
| £35,000 | £600 | £3,400 | 15% |
| £40,000 | £600 | £3,400 | 15% |
| £45,000 | £600 | £3,400 | 15% |
| £50,000 | £1,146 | £2,854 | 29% |
| £60,000 | £1,200 | £2,800 | 30% |
| £80,000 | £1,200 | £2,800 | 30% |
| £100,000 | £1,800 | £2,200 | 45% |
Your salary plus this taxable profit comes to £38,000. The higher rate starts at £50,270, so about £12,270 more profit would still be taxed at the basic rate — past that, every extra pound of side income is taxed at 40% rather than 20%.
Self Assessment also collects student loan repayments on side income. If your salary is already above your plan's threshold, expect an extra 9% of the taxable profit (6% for Postgraduate Loans) on top of the figures above. If your total income is below your threshold, nothing changes.
About £600 at a £35,000 salary: £600 income tax on the £3,000 above the trading allowance, plus £0 Class 4 National Insurance.
Yes — gross side income over £1,000 means you must register as a sole trader by 5 October 2027 for income earned in this tax year, and file by 31 January 2028.
No — it is one or the other. You claim the flat £1,000 allowance, or your actual expenses if they are higher, never both. These pages assume the allowance, which is the right choice for most low-cost side income.
Not from this. Side income is reported by you through Self Assessment, not through payroll. HMRC may adjust your tax code to collect what is owed unless you opt to pay through the return instead.
Rules checked 18 August 2026 against GOV.UK pages showing the 2026/27 tax year. This is information, not tax advice; your Self Assessment is the authority on what you actually owe.