How much tax on £10,000 of side income?
Worked examples for 2026/27 and 2027/28, whether you have no job, a basic rate salary or a higher rate salary.
Tax on £10,000 side income in 2026/27
These figures assume the £1,000 trading allowance is taken off, which is the best option unless your costs are higher. They are for England, Wales and Northern Ireland.
| Your situation | Income tax | Class 4 NI | Total | You keep |
|---|---|---|---|---|
| No other income | £0 | £0 | £0 | £10,000 |
| Salary of £25,000 | £1,800 | £0 | £1,800 | £8,200 |
| Salary of £45,000 | £2,546 | £0 | £2,546 | £7,454 |
| Salary of £60,000 | £3,600 | £0 | £3,600 | £6,400 |
On a £45,000 salary, part of the profit goes over £50,270 into the higher rate band, so it costs more than on £25,000. On £60,000 you are already a higher rate taxpayer, so all the profit is taxed at 40%. Class 4 National Insurance is worked out on your side profit alone, and only starts once that profit goes over £12,570, so there is none to pay here.
What changes in 2027/28
The October 2026 Budget triples the trading allowance to £3,000 from 6 April 2027. Here is the same £10,000 in 2027/28:
| Your situation | Income tax | Class 4 NI | Total | You keep |
|---|---|---|---|---|
| No other income | £0 | £0 | £0 | £10,000 |
| Salary of £25,000 | £1,400 | £0 | £1,400 | £8,600 |
| Salary of £45,000 | £1,746 | £0 | £1,746 | £8,254 |
| Salary of £60,000 | £2,800 | £0 | £2,800 | £7,200 |
For a basic rate taxpayer that is a saving of £400 on the same side income.
If you have expenses
You can take off either the trading allowance or your actual business costs, not both. If your costs were £3,000 (30% of your income), on a £25,000 salary you would pay £1,400, because claiming your costs beats the £1,000 allowance.
See the full list of expenses you can claim.
What else to know
- Because it is over £1,000, you need to register for Self Assessment by 5 October after the end of the tax year and file a return.
- From 6 April 2027 the trading allowance rises to £3,000, which takes another £2,000 of profit out of tax if you use the allowance rather than your actual expenses.
With a tax bill over £1,000, you will probably also have to make payments on account towards next year's bill.
Common questions
Do I pay tax on £10,000 of side income?
Yes, on the profit above your trading allowance or expenses. On a £25,000 salary the total is £1,800 in 2026/27. With no other income it is £0.
How much should I set aside from £10,000 of side income?
As a basic rate taxpayer, £1,800, or about £150 a month. As a higher rate taxpayer on £60,000, £3,600.
Do I need to tell HMRC about £10,000 of side income?
Yes. Register for Self Assessment by 5 October after the end of the tax year, and file your return by 31 January.
Assumes the standard Personal Allowance, salary taxed through PAYE and no other income. Scotland has different income tax bands. 2027/28 figures follow the October 2026 Budget and still need to be passed into law. Sources: GOV.UK income tax rates, trading allowance.