Is Your Side Hustle Worth It? Work Out Profit per Hour

By Cedar & Ledger

A side hustle can bring in a lot of sales and still pay you very little for your time. Fees, supplies, shipping and driving all come out first, and the hours add up quietly. The simplest check is profit per hour: what you actually kept, divided by the time it took. This guide shows how to work it out for one side hustle or compare two, with made-up example numbers.

The side hustles and every dollar figure below are made-up examples, not typical earnings. This is general information, not financial or tax advice. The numbers here are before taxes; side hustle income is usually taxable, so what you keep after tax will be lower.

Quick checklist

• ☐ Pick one month to look at
• ☐ Add up what customers paid you (gross sales)
• ☐ Take out platform fees, supplies, shipping and other costs
• ☐ Count business miles if you drive for it
• ☐ Count every hour, including messages, shopping for supplies and packing
• ☐ Divide profit by hours
• ☐ Compare with your other options, then decide what to change

Step 1: Work out the month's profit

Start with gross sales, then take out everything the hustle cost you that month: platform or payment fees, supplies and materials, shipping, ads, software. If you drive for it, put a value on those miles too. For the example we use a made-up $0.50 per mile; for real tax records, look up the current IRS standard mileage rate.

Step 2: Count all the hours

This is the part most people underestimate. Count the time you're paid for, and also the time around it: replying to messages, buying supplies, making listings, packing orders, driving. A rough log on your phone for one month is enough.

Step 3: Divide profit by hours

Here's a made-up month with two side hustles:

The candle shop had more sales, but tutoring paid almost three times as much per hour. That doesn't mean the candle shop is a bad idea. It means you know what you're trading for it.

Step 4: Decide what to change

If a hustle's profit per hour is lower than you'd like, there are a few levers:

• Raise prices. In the example, if the candle shop raised prices 10% and sold the same amount, sales would be $682.00, fees $81.84 and profit $354.16, or about $11.81 an hour over the same 30 hours. Fewer people might buy at a higher price, so watch the next month's numbers.
• Cut the slow tasks. Making candles in bigger batches, or answering messages once a day, can cut hours. At 24 hours instead of 30, the original $299.60 profit is about $12.48 an hour.
• Lower costs. Buying materials in bulk or switching to cheaper shipping supplies.
• Spend more time on the better one. If you have limited hours, the one that pays more per hour may deserve more of them.

If you sell handmade items, How to Price Handmade Products walks through building a price from materials, time and fees.

Step 5: Check it every month

One month can be unusual. Check profit per hour each month for three months or so before making a big decision. Side Hustle Budget: Tracking Your First $1,000 covers a 10-minute weekly routine that keeps the numbers up to date, and How Much to Set Aside for Side Hustle Taxes explains why the after-tax number will be lower.

Common mistakes

• Looking at sales instead of profit. Sales can grow while profit per hour shrinks.
• Leaving out "small" hours. Messages, listings and supply runs often add up to more than the main work.
• Forgetting fees taken out before the deposit. Log the full sale and the fee separately so both show.
• Ignoring driving costs. Gas and wear on your car are real costs even if no bill shows up.
• Deciding after one month. Seasonal sales can make one month look much better or worse.

A spreadsheet for the profit side

You can do all of this with a notebook. If you'd like a spreadsheet, the Side Hustle Income & Expense Tracker ($7, Excel and Google Sheets) logs income from up to 8 streams with platform fees taken out, expenses by category, and a mileage log valued at a rate you set. Its dashboard shows net income, expenses, mileage and profit by month and by stream, plus a tax set-aside estimate at a percentage you choose. It doesn't track hours, so keep a simple hours log next to it and divide each stream's profit by its hours. It doesn't connect to your bank, and the set-aside is a rough estimate, not a tax calculation (details).

Honest note: I make this template and sell it under Cedar & Ledger, so I'd earn from a purchase. General information only, not financial or tax advice.

Try the free side hustle tax calculator (how much to set aside) →

Try the free side hustle profit per hour calculator →

Try the free Etsy fee calculator →

Related template: read about the side hustle tracker template

See all Cedar & Ledger templates