Side Hustle

Income-generating work done outside of primary employment — ranging from freelance projects to small businesses to passive income streams.

A side hustle is any work you do to earn money outside of your primary job. It can be closely related to your main career (a software engineer who freelances on weekends), completely different (a teacher who runs an Etsy shop), or passive (a content creator who earns ad revenue). Side hustles have become mainstream — surveys suggest a significant and growing share of full-time workers have some form of secondary income, driven by financial goals, creative outlets, career exploration, or the desire to build something of their own.

Before starting a side hustle, review your employment agreement carefully. Many offer letters include moonlighting clauses, IP assignment agreements, or non-compete provisions that may restrict side work — particularly work in the same industry or that uses company resources. The IRS requires you to report all income, including side hustle income, and if you earn more than $400 from self-employment you'll owe self-employment taxes. Side hustles that grow significantly may need to be structured as a formal business entity.

Things to Check Before Starting

  • Review your employment agreement for moonlighting, IP assignment, or non-compete clauses.
  • Never use company time, equipment, or resources for your side hustle.
  • Keep your side hustle in a different field if your employer has broad IP or non-compete provisions.
  • Set up separate banking and accounting for your side income.
  • Pay quarterly estimated taxes if you expect to earn more than $1,000 from the side hustle.
  • Consider an LLC once income becomes significant — it separates liability and looks more professional to clients.

Example

A marketing manager starts a newsletter about sustainable fashion in her spare time. After 18 months she has 12,000 subscribers and earns $2,500/month from sponsorships. She checks her employment agreement — it doesn't restrict outside work in unrelated fields — and continues growing it as a potential future business.