Ways of working · 6 min read
Can I start a side hustle while employed?
Whether you can start a side hustle while employed, what to check in your contract, how tax works in the UK and US, and how to test an idea in spare hours.
The short answer
Usually yes. Most employees can earn money outside work, as long as the side hustle doesn't break their contract. Check for clauses about other work, conflicts of interest, confidentiality and intellectual property, and declare it if your employer requires that. Work on it in your own time, with your own equipment. Income counts for tax: in the UK, the first £1,000 of trading income a year is covered by the trading allowance, and above that you'll usually register for Self Assessment. In the US, you generally owe self-employment tax once net earnings reach $400. A side hustle is also a low-risk way to test a different kind of work.
Key takeaways
- Most employees can run a side hustle if it doesn't breach their contract.
- Check for conflict, confidentiality and intellectual property clauses.
- Use your own time and equipment, and declare it if required.
- Report the income: UK and US tax rules apply from low amounts.
On this pageCheck your contract first
Check your contract first
- Outside work or moonlighting: do you need permission or to declare it?
- Conflict of interest: is your idea close to your employer's business?
- Confidentiality: are you using anything you learned at work?
- Intellectual property: what does the contract say about things you create?
- Company equipment and time: keep both out of it.
Tax basics
| UK | US | |
|---|---|---|
| Small amounts | Trading allowance covers up to £1,000 a year | Self-employment tax from $400 net earnings |
| Register | Self Assessment if over the allowance | File Schedule C and SE with your return |
| Pay | Through your tax return | Often quarterly estimated payments |
| Keep | Records of income and costs | Records of income and costs |
Choose a side hustle that teaches you something
If you're thinking about a career change, choose a side hustle close to the work you're curious about. Tutoring tests teaching. Building websites for local businesses tests web development. Helping friends with their budgets tests financial planning. Each gives you evidence about whether you like the work, not just whether it pays.
Test an idea in four weeks
- Week one: write what you'll offer, to whom, and at what price.
- Week two: tell ten people and ask whether they or someone they know would pay.
- Week three: do one paid or free piece of work.
- Week four: review what you enjoyed, what people valued, and whether to continue.
Protect your main job
Don't let the side hustle eat into your work time, or your energy for the job that pays the bills. Set fixed hours for it, keep your employer's clients and contacts out of it, and be careful about promoting it on professional networks your employer watches.
Illustrative example
Carlos, an accounts assistant, starts bookkeeping for two local tradespeople on Saturday mornings. His contract requires him to declare outside work, so he does, and his employer agrees as long as he doesn't take on clients in their sector. He earns about £2,000 in the first year, registers for Self Assessment, and finds he enjoys working directly with small business owners.
Ideas that need little money to start
- Tutoring or coaching in a subject you know well.
- Bookkeeping, admin or social media help for small businesses.
- Writing, editing or translation.
- Making and selling products at markets or online.
- Pet sitting, dog walking or local services.
What happens to the gaps
Most posts ask for something your CV doesn't show yet. OffLadder CV names those gaps, and Laddie, our AI coach, turns each one into three steps:
- Learn the skill: a short lesson on what the post asks for, starting from the basics.
- Try the work: a 15-minute task taken from the job itself, so you have a real example to talk about.
- Practise the interview: a five-question mock interview for that role, weighted to the parts you're least sure of.
The conversation stays in your OffLadder account. Once you've done the work, add it to your CV in your own words, and the next post you tailor for can point to it.
Questions people ask
- Does my employer own what I create in my spare time?
- It depends on your contract and the law where you live. Many contracts claim ownership of work related to the business or made with company resources. Keep your side project separate and check the wording.
- Do I need to tell my employer?
- If your contract or policies require you to declare outside work, yes. If not, it's still wise to mention anything that could look like a conflict.
- How much can I earn before paying tax in the UK?
- The trading allowance covers up to £1,000 of gross trading income a year. Above that, you'll usually need to register for Self Assessment and pay tax on profits.
- What about selling online in the UK?
- Selling your own unwanted things isn't trading. Buying to resell or making things to sell is. Online platforms now report some sellers' income to HMRC.
- When do I owe tax on a side hustle in the US?
- Generally once net self-employment earnings reach $400 in a year, you file Schedule SE and pay self-employment tax. You may need to make quarterly estimated payments.
- Can a side hustle turn into a career change?
- Yes, and it's one of the safest ways to change. You find out whether you like the work and whether people will pay, before you leave your job.
Exercises are practice, not evidence of career fit or a qualification. How to read our guides and report a correction.
Sources
- Tax-free allowances on property and trading income · GOV.UK
- Self-employed individuals tax center · Internal Revenue Service
How this page is written
Sources support the factual background, not a guarantee that an exercise predicts career fit. Fictional practice material is labelled. Dates record content updates; no independent expert review is implied. More about OffLadder.