Side Hustle Glossary
Understanding the terminology is the first step to understanding your numbers. Here are the key terms you'll encounter when calculating side income.
Creator Economy
CPM (Cost Per Mille)
The amount advertisers pay per 1,000 ad impressions. On YouTube, this determines how much you earn from ads shown on your videos. CPM varies by niche, with finance/business typically paying $12-30 and gaming paying $2-8.
Creator Fund
TikTok's program that pays creators based on video views. Pays approximately $0.02-$0.08 per 1,000 views. Requires 10,000 followers and 100,000 views in the last 30 days to join.
Engagement Rate
The percentage of your audience that interacts with your content (likes, comments, shares, saves). Calculated as: (Total Engagements / Followers) × 100. Higher engagement often means more valuable sponsorships.
RPM (Revenue Per Mille)
Your actual earnings per 1,000 views after YouTube takes their 45% cut. RPM is typically 55% of CPM. This is the number that matters for your income.
Driving
Dead Miles
Miles driven without a paying passenger or delivery. This includes driving to pickup locations and repositioning between zones. Dead miles cost money but generate no income.
Depreciation
The decrease in your vehicle's value over time due to use and age. For gig drivers, this is often the largest hidden cost—a $20,000 car driven 20,000 miles/year might depreciate $3,000-4,000 annually.
Multi-Apping
Running multiple delivery or rideshare apps simultaneously to minimize downtime between orders. Common strategy for gig drivers to maximize hourly earnings.
Surge Pricing
Increased pay rates during high-demand periods for rideshare. Can multiply base earnings 1.5-3x during busy times like rush hour, events, or bad weather.
Financial
Break-Even Point
The point at which your total revenue equals your total costs, meaning you've recovered your initial investment. For equipment, this is how many paid uses before the gear "pays for itself."
Effective Hourly Rate
Your true earnings per hour after accounting for all costs and time invested. This includes prep time, driving to locations, editing, etc.—not just "active" earning time.
Gross Income
Your total earnings before any deductions. This is often what platforms display, but it doesn't account for fees, costs, or taxes.
Net Income
Your take-home earnings after ALL expenses and fees are deducted. This is what actually goes into your pocket, not the number the app shows you.
Payment Processing Fee
Fees charged for handling the money transfer, typically 2.9-3% plus a flat fee ($0.25-$0.50). Every platform charges this, sometimes hidden within other fees.
Profit Margin
The percentage of revenue that becomes profit. Calculated as: (Profit / Revenue) × 100. A healthy reselling margin is typically 30-50% after all fees.
ROI (Return on Investment)
The percentage return you earn relative to your investment. Calculated as: (Profit / Investment) × 100. For example, if you invest $100 and earn $150 back, your ROI is 50%.
Photography
Stock Photography Royalty
The payment you receive each time someone downloads your stock photo. Typically $0.10-$0.50 on subscription platforms, but can be $10-$50+ on premium platforms like Alamy.
Reselling
Final Value Fee
eBay's main selling fee, calculated as a percentage of the total sale amount (currently 13.25% for most categories). This is charged when your item sells.
Platform Fees
Charges taken by selling platforms from your sales. These include listing fees, transaction fees, and payment processing fees. Total fees often range from 10-25% of sale price.
Transaction Fee
A percentage-based fee charged by platforms on each sale. Etsy charges 6.5%, for example. This is separate from payment processing fees.
Taxes
Quarterly Estimated Taxes
Tax payments made four times per year by self-employed individuals (due April 15, June 15, September 15, January 15). If you expect to owe $1,000+ in taxes, you should make these payments to avoid penalties.
Self-Employment Tax
The 15.3% tax that self-employed workers pay for Social Security and Medicare (7.65% that would normally be paid by an employer, plus your 7.65% employee portion). This is in addition to income tax.
Standard Mileage Deduction
The IRS-approved per-mile deduction for business use of your vehicle. For 2024, this is $0.67/mile. You can either use this or deduct actual vehicle expenses, but not both.
Ready to run some numbers?
Now that you understand the terminology, try our calculators.
Definitions are simplified for educational purposes. Tax and financial terms may have specific legal definitions that differ. Consult a professional for advice specific to your situation.