Side hustle income and SARS: what you need to know
Freelance gigs, weekend work, selling online — when extra income becomes taxable, what you can deduct, and what provisional tax means.
6 min read
Design work on weekends, tutoring, a resale hustle, freelance code — extra income is normal now. What's less known: SARS's rules for it. The good news is they're manageable if you know three things.
1. Yes, it's taxable — all of it
There's no "under the table" threshold for side income. Money earned from freelancing or trading is added to your salary and taxed at your marginal rate — because your salary already used up the lower brackets and the rebate (how brackets work).
Earn R300,000 at your job and R30,000 on the side? That R30,000 is taxed at 26% — roughly R7,800. Price your side work knowing SARS is a silent partner. (Occasional sales of personal stuff — your old couch — aren't income. A pattern of buying-to-resell is.)
2. You can deduct real expenses
Side income is taxed on profit, not revenue. Costs genuinely incurred to earn it are deductible:
- Software, hosting, tools and materials
- A fair share of data/internet used for the work
- Travel to clients (keep a logbook)
- Equipment — laptops and gear, written off over time
Two habits make this painless: a separate bank account for hustle money, and a folder (even just photos) of every invoice and receipt. Reconstructing a year of expenses in July is misery; capturing them weekly is nothing.
3. Provisional tax: paying as you go
PAYE handles tax on your salary automatically. Nobody withholds tax on side income — so SARS may classify you as a provisional taxpayer, which just means paying your estimated tax in two instalments (end of August and end of February) instead of one surprise bill at filing season.
It's a payment schedule, not an extra tax. The real risk is spending your gross side income and meeting February with nothing saved. The fix: move your marginal-rate percentage of every side payment into a separate savings pocket the day it lands. If it turns out you over-saved, that's a bonus, not a loss.
When it grows
Once a hustle becomes a real business, other structures exist — registering a company, turnover tax for small businesses (a simplified flat-rate system for turnover under R1 million), and VAT registration once turnover crosses R1 million. Those are good problems, and worth professional advice when you get there.
The bottom line
Declare it, deduct honestly, and save the tax as you earn. A side hustle that's clean with SARS is an asset; one that isn't is a liability with interest.