How Much Tax Will I Pay on My Side Income?
Tutoring, freelancing, deliveries, a market stall: side income adds up, and so does the tax on it. Nobody withholds it for you, so it all lands when you lodge. Work out what to set aside now.
Side income is added to your salary and taxed at the rate on top, plus the 2% Medicare levy. On a typical salary that's 32 cents of every dollar of profit, and more on higher salaries. Nobody withholds it, so set it aside as you're paid. GST starts at $75,000 of turnover (rideshare from the first dollar).
Your side income, this year
On 2026-27 rates. Nothing you enter is saved or sent.
Extra tax because of your side income
$4,160
on $13,000 of profit after costs
Set aside about 32 cents of every dollar of profit.
- GSTNot yet
You need to register once your turnover reaches $75,000. You're at $15,000.
- PAYG instalmentsLikely next year
With side income of $4,000 or more and a tax bill of $1,000 or more, the ATO may put you on quarterly PAYG instalments after you lodge. They spread next year's tax out; they aren't extra tax.
- Tax withheldNone on side income
Nobody withholds tax from side income, so the whole amount above is due when you lodge, unless you ask your employer to withhold more from your wages to cover it.
- SuperUp to you
Side income doesn't come with super. You can make a personal contribution and usually claim it as a deduction, within the $32,500 concessional cap for 2026-27 (including your employer's super).
Estimate only, on 2026-27 rates, for an Australian resident. Assumes private hospital cover (no Medicare levy surcharge) and no study loan repayments; the $1,000 standard deduction applies to your salary only. General information, not advice.
All side income is taxable
Cash or bank transfer, through an app or not, with or without an ABN: income from side work goes on your tax return. Many platforms report what they pay you to the ATO, so it often shows up anyway.
Why it's taxed at your top rate
Your salary has already used up the lower tax brackets. Side profit sits on top, so it's taxed at the rate for that slice of your income, plus the Medicare levy. On a salary between $45,000 and $135,000 that's 30% plus 2%. The $1,000 standard deduction from 2026-27 applies to your salary, not to business income.
What you can claim
Costs you incur to earn the side income are deductible: equipment, software, the work share of your phone and internet, and running costs. Keep a record of each. If you invoice through an ABN mainly for your own skills, the personal services income rules can limit some claims. Source: ATO — personal services income.
GST and PAYG instalments
You need to register for GST once your business turnover reaches $75,000 a year, or from the first dollar if you drive passengers for rideshare or taxi. Once your side income is established, the ATO may put you on PAYG instalments: quarterly prepayments of next year's tax, which stop the bill landing all at once. Sources: ATO — registering for GST and PAYG instalments.
Three ways to avoid the bill shock
- Move the set-aside amount into a separate account each time you're paid.
- Ask your employer to withhold extra tax from your wages to cover your side income.
- If you're on PAYG instalments, check they match what you expect to earn this year.
Frequently asked questions
See your whole year
Add your side income to the free estimate alongside your salary, deductions and other income.
Related reading
- Employee or contractor?A salary next to a day rate, and how ABN income is taxed.
- Side hustle and gig tax guidePlatform reporting, ABNs, GST and what you can claim.
- Second job taxTwo employers, two tax-free thresholds, and how to avoid a bill.
- When a tax agent is worth itThe signs, the later lodgment date, and what to bring.
This guide is general information only and not personal tax advice. Always confirm with the ATO at ato.gov.au or a registered tax agent before lodging.