Calculator / Side hustle and W-2

Side hustle plus a W-2 job: do you owe quarterly taxes?

Your employer withholds tax from your paycheck. Your side income has nothing withheld. Here is how the two fit together and how to cover the gap.

The basic rule

The IRS says you generally must pay estimated tax if you expect to owe $1,000 or more when you file, after subtracting withholding and credits. Taxes are meant to be paid as you earn income, either through withholding or through estimated payments. Withholding from your job counts toward that total.

What your side income adds

Income tax on the profit, at the same rates as the rest of your income. Profit is what is left after business expenses.
Self-employment tax of 15.3% on 92.35% of net profit: 12.4% for Social Security and 2.9% for Medicare. It applies when net earnings reach $400.
The Social Security cap. For 2026 the Social Security part stops at $184,500 of combined wages and self-employment earnings. If your job wages already reach that, only the Medicare part applies to your profit.

Two ways to cover it

Pay estimated tax on the four due dates (see due dates). This is the usual route for a side business.
Raise the withholding at your job. You file a new Form W-4 with your employer and enter an extra amount on line 4(c). IRS Publication 505 describes this, and the IRS Tax Withholding Estimator can help you choose the amount. Because withholding is taken from your pay, there is no payment to remember.

One detail makes withholding useful: unless you choose otherwise, the IRS generally treats withholding as paid in equal parts on each due date, no matter when during the year it was actually taken. Extra withholding added late in the year can therefore help cover earlier periods. Publication 505 explains the exception if you want to use actual dates.

An example

Single filer, $60,000 of W-2 wages with $6,500 withheld, and $20,000 of net profit from a side business. The calculator's estimate, using 2026 figures, is about $2,826 of self-employment tax and about $8,459 of income tax, roughly $11,285 in all. After the $6,500 withheld, about $4,785 is still unpaid. To stay at the 90% safe harbor for the current year, about $3,657 more is needed. That could be spread over the estimated payments still ahead, or over your remaining paychecks as extra withholding.

This example uses the standard deduction and ignores credits, other deductions and state tax, so your own number will differ. Enter your wages and withholding under "More options" in the calculator.

Safe harbor

You generally avoid the underpayment penalty if what you paid through withholding and estimates is at least the smaller of 90% of this year's tax or 100% of last year's total tax. If your adjusted gross income last year was above $150,000 ($75,000 if married filing separately), the prior-year amount is 110% instead of 100%.

This is general information, not tax advice. See the disclaimer.

Sources

Last checked October 11, 2026.