The Hidden Costs of Running a Side Hustle Nobody Tells You About

By Ben, Founder of Zankex  ·  Published May 2026  ·  7 min read

The side hustle content online is full of "I made £5,000 last month!" It is rarely followed by "...and here is what I actually kept after every cost." This post is that second part.

Why side hustle profit is almost always lower than it looks

Revenue is the number people quote. Profit is the number that matters. The gap between the two — what gets consumed by costs — is almost always larger than new side hustlers expect.

I have run a side business alongside my consultancy for years. The first year I thought I was doing well. The second year, once I tracked everything properly, I discovered I was keeping about 55% of what I billed. The other 45% evaporated into costs I had not fully accounted for.

The costs most people forget to include

1. Platform fees
Etsy charges 6.5% of every sale plus listing fees. Fiverr takes 20%. Upwork takes 10-20%. PayPal charges 2.9% plus a fixed fee on every transaction. These add up to a significant reduction before you see any money. On a £500 project through multiple platforms, you might pay £60-100 in fees alone.

2. Tax — the one most people ignore until January
In the UK, self-employment income above £12,570 is taxed at 20% (basic rate) plus Class 4 National Insurance at 9%. On £20,000 net profit, you owe approximately £3,600 in tax and NI. That money needs to be set aside throughout the year — not found in January.

3. Software subscriptions
Design tools, editing software, booking platforms, accounting tools, email marketing, website hosting. Each one feels small. Together they easily reach £100-200/month. See our subscription waste guide for how to audit these.

4. Equipment and depreciation
The laptop you bought for £900 "for work" cost £900. Over three years, that is £300/year as a real business cost. Camera, lighting, microphone, desk, chair — all real costs that reduce your actual profit. Most people buy the equipment and forget to account for it ongoing.

5. Marketing and advertising
Getting clients costs money. Facebook ads, Canva Pro, Pinterest promoted pins, business cards, website costs. Even "free" marketing costs time — which has a real value.

6. Packaging and materials (product businesses)
Boxes, tissue paper, labels, tape, postage, bubble wrap. If you sell physical products, packaging costs regularly run 10-20% of revenue. This is often massively underestimated at the start.

7. Returns and disputes
Refunds, chargebacks, disputed payments. In a healthy business, expect 2-5% of revenue to come back. Budget for it — don't be surprised by it.

8. Your time (the invisible cost)
Time is money — literally. If you spend 20 hours on admin, marketing and client management for every 40 hours of billable work, your real hourly rate is 60% of what you quote. Time spent on the business but not billed to anyone is still a real cost.

Worked example: What £3,000 revenue actually becomes

You run a freelance graphic design side hustle. Last month you billed £3,000.

Revenue: £3,000

Less: Platform fees (PayPal + Stripe, ~3%): -£90

Less: Software (Adobe, Canva, project management): -£120

Less: Equipment amortisation (laptop, tablet, etc.): -£75

Less: Marketing and ads: -£50

Less: Proportion of broadband/phone: -£30

Profit before tax: £2,635

Less: Tax estimate (20% income tax + 9% NI on profit above allowance): -£395

Real monthly take-home: approximately £2,240
That is 74.7% of your headline revenue figure. Not terrible — but meaningfully less than £3,000.

What to do about it

Track everything from day one. The moment you stop guessing and start tracking, you see exactly where the leaks are. Most people find 2-3 areas they can immediately fix.

Audit subscriptions quarterly. Cancel anything you have not used in 3 months. Re-evaluate everything annually.

Set aside tax as you go. A separate savings account that receives 25-30% of every payment keeps January from being a disaster.

Calculate your real profit monthly. Not annually. Monthly. If something is going wrong, monthly tracking catches it in 30 days instead of 365.