Overtime vs Side Hustle
Should you stay late at work or build something on the side? This calculator compares the real take-home pay for each option.
The Real Comparison
This is a decision many people face: your employer offers overtime, but you've been thinking about starting a side hustle. Which actually puts more money in your pocket?
The Overtime Advantage
Overtime has several built-in advantages that are easy to overlook. You get paid time-and-a-half (or sometimes double) for extra hours. Your employer covers half of your Social Security and Medicare taxes. There are no startup costs or learning curves. And the income is guaranteed—you work the hours, you get paid.
The Side Hustle Case
Side hustles have different strengths. They can grow beyond hourly work into something scalable. You build skills and relationships outside your employer. You control your schedule and can work when you want. And some side hustles can eventually replace your job entirely if that's your goal.
The Tax Reality
Overtime (W-2)
- Employer pays 7.65% payroll tax
- You pay 7.65% + income tax
- No additional forms or quarterly payments
- Taxes withheld automatically
Side Hustle (1099/SE)
- You pay full 15.3% SE tax
- Plus income tax on net earnings
- Quarterly estimated payments required
- More deductions available
Beyond the Numbers
Money isn't everything. Consider these factors that don't appear in the calculator:
- •Burnout risk: 60+ hour weeks at one employer can drain you faster than diverse work
- •Job security: Side income provides backup if you lose your main job
- •Skill development: Side hustles often teach entrepreneurial skills your job won't
- •Career leverage: Overtime shows loyalty but side skills can increase your market value
Common Questions
Why might overtime be better than a side hustle?
Overtime comes with guaranteed pay, no startup costs, existing skills, and your employer handles half your payroll taxes. You also get overtime premium (usually 1.5x). Side hustles have variable income, startup costs, and you pay the full 15.3% self-employment tax.
When is a side hustle the better choice?
Side hustles can be better when overtime is not available, when you want to build skills for a career change, when the side hustle has growth potential beyond hourly earnings, or when you value the flexibility and independence more than maximizing immediate income.
How does the tax calculation work?
Overtime is taxed as regular W-2 income—your employer pays half of Social Security and Medicare taxes. Side hustle income triggers self-employment tax (15.3%) on top of income tax. This makes the effective tax rate on side hustle income often 10-15% higher than W-2 overtime.
Tax calculations are simplified estimates. Actual tax liability depends on your complete financial situation including deductions, credits, state taxes, and other factors. Consult a tax professional for personalized advice.