What is a side hustle? Your guide to extra income ideas
Learn the steps to start a side hustle and turn spare time into extra income.
Written by Jotika Teli—Certified Public Accountant with 24 years of experience. Read Jotika's full bio
Published Tuesday 16 December 2025
Table of contents
Key takeaways
- Assess your skills and interests first to identify side hustles that align with your talents and passions, as this alignment improves both your results and enjoyment while requiring significant time investment.
- Check your employment contract and discuss with your employer before launching any side hustle, since many employers require disclosure or approval, especially if your work relates to your day job or involves clients.
- Establish reliable payment methods and track all income and expenses using accounting software, as side hustle income is subject to taxes and requires filing a tax return if you earn $400 or more in net earnings.
- Focus on high-value services and build repeat clients to reach substantial monthly income, as most successful side hustlers earn between $200–$1,000 per month by working consistently 15–20 hours weekly.
What is a side hustle?
A side hustle is flexible work you do alongside your regular full-time job to earn extra income. You can turn almost any skill or interest into a side hustle.
The key differences between a side hustle and a second job:
- Second job: Set schedule, employer paycheck, fixed hours
- Side hustle: Flexible timing, direct client payments, work in spare time (evenings and weekends)
Common side hustles include consulting, tutoring, selling handmade crafts, or freelance design work. Some people use side hustles for passive income, while others actively supplement their earnings. Sometimes a modest side gig can grow into a full-time career.
Why start a side hustle?
People start side hustles for various financial reasons. A 2023 Bankrate survey found the top motivations:
- 33% cover day-to-day living expenses
- 27% increase discretionary spending money
- 25% boost savings
- 12% repay student loans and debt
The pros of starting a side hustle include:
- expanding a hobby, gaining experience, and developing skills
- generating additional income for financial stability and independence
- enjoying the freedom and control of being your own boss
- low startup costs make it a low-risk business option
The cons of starting a side hustle include:
- the time, energy, and commitment required
- increased stress levels from balancing other responsibilities
- distraction from your main job that could impact performance
- the risk of scams that result in financial loss or disappointment
Popular side hustle ideas
The best side hustle depends on three key factors: your goals, available time, and personal interests.
Choose something you're passionate about. You'll find it easier to dedicate time and energy when you're excited about the work.
Important: Check your employment contract first to ensure your side hustle won't conflict with your current job.
Online business
Online businesses offer location flexibility and flexible scheduling, making them ideal side hustles. This option is best for professional services, or work that doesn't require a physical office location.
Popular options:
- Freelancing: Use your existing skills for independent clients
- Consulting: Offer expertise in your field (like SEO marketing professionals consulting on the side)
Start by reaching out to people you already know. Always verify there's no conflict of interest with your current employer first.
Freelance writers can earn money by creating content such as blog posts, articles, ghostwriting projects, and editing. If you prefer speaking over freelance writing, consider teaching English through a platform like VIPKid that connects you with students around the world.
Platforms like Substack make it easy to make money online with your writing. If you enjoy sharing your thoughts or expertise, consider starting a blog. After you start getting a following, you can offer premium content to those who buy a subscription.
If you have skills at creating visual content, graphic design can put cash in your pocket. You could create social media images, brochures, and logos for clients.
Many businesses look for help with email management, scheduling, and customer service. You can fill this need by being a virtual assistant. Bookkeeping and accounting support are also highly sought after by companies and can be a lucrative option if you enjoy managing financial records.
Driver
If you like driving and interacting with people, starting a transportation business could be a great fit. Rideshare drivers might work for Uber or Lyft to help passengers get around town. Apps like DoorDash and Uber Eats specialize in food delivery from restaurants and grocery, convenience, or retail stores.
You can also get paid to shop for and deliver groceries. Instacart and Shipt are two popular grocery delivery services that let you set your own schedule and earn extra pay during peak hours.
Ecommerce
Online selling, or ecommerce, can be a cost-effective business to start as a side hustle.
Dropshipping lets you open an online store without managing inventory or shipping. You promote and sell the products, and a third party handles the rest. For handmade crafts, digital photos, and other more creative products, Etsy, Shopify, Amazon and eBay can be more profitable.
Other opportunities
You can explore countless other side hustles, depending on your skills and interests.
Choose options that match what you enjoy and what people in your area need. For instance, babysitting offers flexible hours and the opportunity to work with children. Becoming a handyperson through an app like TaskRabbit can bring in extra cash.
If you enjoy household tasks, becoming a home assistant or helping with cleaning and chores can be a rewarding choice. Handy is a good app to find such jobs.
Animal lovers can find dog walking and pet-sitting gigs through apps like Wag and Rover, while outdoor enthusiasts might prefer landscaping on the side.
If you have a blog, YouTube channel, or podcast, you can earn commissions by promoting products through affiliate marketing or by selling your own online course.
If shopping is more your style, mystery shopping pays you to shop and report on the customer service you received. On the same note, retail merchandising lets you get your hands on products by setting up store displays.
How much can you make with a side hustle?
Side hustle income varies widely based on your skills, time commitment, and chosen field. Most side hustlers earn between $200–$1,000 per month, though some generate significantly more.
Realistic income expectations by category:
- Freelance writing: $15–$50 per hour ($300–$2,000 monthly)
- Rideshare driving: $10–$25 per hour ($400–$1,600 monthly)
- Online tutoring: $20–$80 per hour ($500–$2,500 monthly)
- Graphic design: $25–$75 per hour ($800–$3,000 monthly)
Factors that impact earnings:
- Time invested: More hours typically mean higher income
- Skill level: Specialized skills command premium rates
- Market demand: Popular services generate more opportunities
- Location: Urban areas often offer higher rates
To build to $2,000+ monthly, focus on high-value services, build repeat clients, and gradually increase your rates as you gain experience.
10 tips for starting your perfect side hustle
Starting a successful side hustle requires strategic planning. Follow these steps to launch a side hustle that's both enjoyable and profitable.
1. Assess your skills and interests
Assess your skills and interests first to maximize your side hustle success and satisfaction.
Why this matters: Side hustles require significant time investment. Aligning with your talents and passions improves both results and enjoyment.
Action step: List what you're good at and what genuinely interests you.
Do you enjoy writing? Are you proficient in graphic design? Do you have a knack for teaching? The idea is to identify a path that matches your skills and is something you enjoy, then find a way to monetize it.
2. Consider the amount of time available and if you are allowed to do it
Check employer policies before starting any side hustle. Employment rules vary significantly:
- Some employers: Completely prohibit side work
- Others: Require prior approval for additional employment
- Major risks: Competing with your employer or taking their clients
Action required: Review your employment contract or employee handbook, and discuss with your employer before launching your side hustle.
Also consider the time you can commit to a side project. Look at your work and family commitments to determine your available free time. Consistent effort is key, but overcommitting to your side hustle at the expense of your day job or personal life could lead to burnout.
3. Create a basic business plan
A one-page business plan helps you evaluate your idea's viability and provides a clear roadmap for success.
Essential elements to include:
- The value your business idea brings to customers, the market demand, and how you can set your side hustle apart from your competition
- The preferences, demographics, and purchasing behaviors of your target audience, and how well your idea addresses needs or gaps in the market
- The funding you need to launch your side hustle, where the money will come from, and a budget that outlines your projected revenue, expenses, and profitability
- The marketing strategies you'll need to reach your target audience, including the channels, tactics, and messaging you'll use to reach your sales goals
It also helps to define an initial timeline that outlines key milestones and deadlines for launching and growing your side hustle. Include your accountant and any other professional advisors or partners in your plans. Their expertise and support can go a long way to ensuring your success.
4. Consider legal requirements
When you plan your side hustle, consider the legal aspects of starting and running a business. Depending on the type of work, some cities and states may require you to register your business. You may also need a permit or license to operate legally.
Consider your business structure. The Internal Revenue Service (IRS) automatically classifies you as a sole proprietor unless you set up a legal entity.
Some people prefer to set up a limited liability company (LLC) to separate their work from their personal situation. For tax purposes, a single-member LLC is required to use its own name and employer identification number (EIN) for reporting and paying employment taxes.
Another way to protect yourself is through business insurance, such as a small business general liability policy.
5. Set your prices
When setting your prices, consider your experience level, competitor rates, and operating costs. Set prices that reflect your skills and the value you provide, whether you charge hourly, by the project, or for physical products. Consider your overhead costs and time investment to ensure you make a profit.
Keep business expense records, and hang onto receipts in case you need them for tax purposes. Consider opening a business bank account or a dedicated personal account to separate your business and personal finances.
6. Establish payment methods
Establish reliable payment methods to ensure you get paid promptly for your work.
One solution is to set up professional invoicing through online systems like Xero that streamline the payment process. New to invoicing? Use our freelance invoicing guide to get started.
7. Consider taxes
Side hustle income is subject to taxes just like any business income, and the IRS requires you to file a tax return if you have net earnings of $400 or more from this work.
Key tax requirements:
- Self-employment taxes: Required on non-W-2 income for Social Security and Medicare, which are typically paid through estimated tax payments that are due four times a year
- Schedule C: Add to your tax return as a sole proprietor
- Separate returns: Required if you form a corporation
Use accounting software to track income, expenses, and tax documentation automatically.
If you set up your side hustle as a legal entity, you'll need an employer identification number (EIN). An EIN is easy to get. It's free and you can request one by submitting a form online.
8. Establish a schedule
Dedicate specific blocks of time to your side hustle and make it a priority. Share your schedule with family and friends to minimize interruptions during the time periods you dedicate to work.
Consistency in your work schedule helps foster productivity and maintain a good work-life balance.
9. Find clients
You have many ways to find and attract clients to your side hustle.
Word of mouth is a powerful tool. Start by spreading the word among your friends and family.
Platforms like Fiverr, Upwork, Craigslist, and NextDoor can be useful for reaching potential clients, but be cautious and watch for potential scams.
Consider setting up a Google business profile and creating social media accounts to increase your visibility.
Ask your satisfied customers for referrals, perhaps offering a small discount or bonus for successful leads.
10. Establish your goals
Set goals to help you stay motivated and make them SMART: Specific, Measurable, Achievable, Relevant, Time-bound. Goals to achieve a certain income threshold or number of clients can serve as a roadmap.
Plans can evolve as your side hustle grows. You may need to revisit and adjust them along your journey.
Manage your side hustle finances with confidence
A central location to track income and expenses, create and send invoices, and satisfy tax obligations can turn a good side hustle into a great side hustle. Fortunately, accounting software doesn't have to eat into your profits. Xero can give you an organized start without spending a lot of money.
Xero simplifies the financial side of your side hustle, so you spend less time on admin and more time doing the work you enjoy. Get one month free.
FAQs on starting a side hustle
Here are answers to common questions about launching and managing a successful side hustle.
What is the most profitable side hustle?
High-skill services like consulting, freelance writing, and online tutoring typically offer the best profit margins, often earning $25–$100+ per hour.
How can I make $2000 a month on the side?
Focus on high-value services, work 15–20 hours weekly, and build repeat clients. Combine multiple income streams or specialize in premium services to reach this goal.
How do I balance a side hustle with my full-time job?
Set specific work hours (evenings/weekends), use time-blocking techniques, and start small with 5–10 hours weekly before scaling up.
Do I need to tell my employer about my side hustle?
Check your employment contract first. Many employers require disclosure or approval, especially if your side hustle relates to your day job or involves clients.
How long does it take to see results from a side hustle?
Most people see initial income within 2–8 weeks, but building consistent monthly income typically takes 3–6 months of regular effort.
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