The Three Taxes on Side Hustle Income in Ireland
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.
Income Tax
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).
Universal Social Charge (USC)
USC rates for self-employed income in 2026:
- 0.5% on income up to €12,012
- 2% on €12,013 – €22,920
- 4% on €22,921 – €70,044
- 8% on income over €70,044
- Self-employed earners with income over €100,000 pay an additional 3% surcharge on income over €100,000
USC applies to gross income before expenses on your PAYE income, but for self-employment income it applies to your net profit after expenses.
PRSI
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.
A Worked Example
Sarah earns €42,000 from PAYE employment and €6,000 net profit from freelance design work.
- Income tax on €6,000 at 40% = €2,400
- USC on €6,000 (approximately 4% band) = €240
- PRSI Class S on €6,000 at 4% = €240
- Total tax on side income = approximately €2,880 (48%)
Rule of thumb: set aside 45–50% of your side hustle profit for tax if you're already a higher-rate PAYE taxpayer.
When do I actually pay the tax I owe?
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.
Can I reduce my tax bill with a pension contribution?
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.
Is there any relief for small amounts of self-employment income?
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.
General information, not personal tax, financial or legal advice. Rules change — check revenue.ie or ask a qualified accountant.