When you earn money outside your PAYE employment in Ireland, three separate charges apply to your profit: Income Tax, Universal Social Charge (USC), and Pay Related Social Insurance (PRSI). Understanding each is essential to budgeting correctly and avoiding an unexpected tax bill.
Self-employment income is taxed at your marginal rate — 20% up to the standard rate cut-off point, and 40% above it. Your cut-off point depends on your PAYE salary. If you're already a higher-rate taxpayer, your side hustle profit is taxed at 40% from the first euro.
Example: If you earn €55,000 in PAYE employment and €8,000 from a side hustle, the €8,000 is almost entirely taxed at 40% (approximately €3,200 income tax on the side income).
USC rates for self-employed income in 2026:
USC applies to gross income before expenses on your PAYE income, but for self-employment income it applies to your net profit after expenses.
Self-employed people pay Class S PRSI at 4% on all income over €5,000. This is separate from the Class A PRSI deducted from your PAYE salary. Class S PRSI gives you access to some social welfare benefits (including the State Pension) but not Jobseeker's Benefit.
Sarah earns €42,000 from PAYE employment and €6,000 net profit from freelance design work.
Rule of thumb: set aside 45–50% of your side hustle profit for tax if you're already a higher-rate PAYE taxpayer.
By 31 October (or mid-November via ROS) of the year following the year you earned the income. You also pay preliminary tax — an advance payment — by the same deadline.
Yes. Self-employed pension contributions are fully tax-deductible against income tax (but not USC or PRSI). This is one of the most effective ways to reduce your side hustle tax bill.
The Earned Income Tax Credit of €1,775 (2026) applies to self-employed income, which partially offsets the tax due. PAYE employees don't get this on top of the PAYE credit for self-employment income — check your position with Revenue.
Tax rates and thresholds change annually. Always verify at revenue.ie or with a qualified accountant.
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