Gig Work Isn't a Side Hustle Shortcut. It's a Second Job with Taxes.

Imagine you're driving for Uber at 11 PM, your back aches, and you've just cleared $19 for a 45-minute ride. You're not alone. Tens of millions of Americans are out there doing the same thing, trying to make extra cash. But let's cut through the hype: gig work isn't the get-rich-quick scheme some influencers pretend it is. The data says it's a second job, with real trade-offs and a tax bill you can't ignore. Here's what you need to know before you download that app.

Is gig work even a real side hustle, or just a second job?

It's a side hustle, but barely. The Federal Reserve's 2024 survey found that 20% of U.S. adults earned money from gig activities in the past month, but only 21% of those considered it their main job (Federal Reserve SHED 2024). That means most gig workers are doing it on top of something else. And it's not full-time: 96% of gig workers spend fewer than 35 hours a week on it, and 70% work fewer than 5 hours (Integra Credit). So, it's a side gig, not a career move.

How much can you actually make?

Not as much as you'd think. The average side hustler earns $891 per month, according to Bankrate's 2024 survey. But that's an average, and it's inflated by a few high earners. A quarter of side hustlers earn $50 or less a month. And if you're doing rideshare or delivery, the pay is worse than you'd expect. A UC Berkeley study of over 52,000 trips found that most gig drivers earned below the local minimum wage after expenses like gas and vehicle wear and tear (UC Berkeley Labor Center). So, don't quit your day job.

Do you actually have to pay taxes on that $50 you made selling old shoes?

Yes. The IRS is clear: gig income is taxable, even if you don't get a 1099-K or 1099-NEC. And the threshold for paying self-employment tax is low—just $400 in net earnings. That $50 from selling old shoes? You might have to report it if it's a business, but if you're just selling your personal stuff at a loss, it's not taxable. But the moment you're buying things to resell, you're in business. And the IRS is watching: payment apps report transactions over $20,000 and 200 transactions, but that's not a free pass. You owe taxes on all of it, reported or not (IRS Gig Economy Tax Center).

Is gig work a good way to make ends meet?

For some, it's a lifeline. The Federal Reserve found that 31% of gig workers said that without gig income, they'd have trouble making ends meet (Federal Reserve SHED 2024). And 55% said it gave them flexible hours. But that flexibility comes at a cost. Gig workers are less likely to be financially comfortable than other adults (65% vs 75%). And 49% wish the pay were more consistent. So, it helps, but it's not a cure-all.

Is it true that most gig workers are young people?

Yes, but not exclusively. The data shows gig work skews young: 30% of 18- to 29-year-olds have ever done it, compared to 7% of those 65 and older (Pew Research Center). But here's the twist: older workers are more likely to be independent contractors on their main job. In 2023, 11.5% of workers 55 and older were independent contractors, versus 6.9% of those 25-54 (BLS). So, if you're young, you're more likely to be doing app-based gigs. If you're older, you might be freelancing as a consultant. Either way, it's not a youth-only thing.

Are you better off with a side hustle than a raise?

Not necessarily. The Quicken survey found that 43% of side hustlers make more money working fewer hours than a single salaried job (Quicken Side Hustle Survey). But that's a self-selected group—people who've cracked the code. The average side hustler makes $891 a month, which is about $10,700 a year. That's not nothing, but it's not a replacement for a salary. And don't forget the self-employment tax: 15.3% on top of income tax (IRS). So, before you start a hustle, ask yourself: is your time better spent asking for a raise or learning a skill that could boost your main income?

What's the smartest way to use your side hustle income?

Don't blow it all on fun. The data shows that 37% of side hustlers use the money for discretionary spending, but 31% save it, and 20% pay down debt (Bankrate). That's a start, but here's the smarter move: invest it in your future. A QUICKEN survey found that 24% of Gen Z invest their side-hustle proceeds, versus 14% of all side hustlers (PYMNTS). And you can put up to $69,000 into a SEP IRA for 2024 if you're self-employed, or $23,000 into a solo 401(k) (IRS). That's how you turn a side gig into a retirement boost.

So, is gig work worth it?

It depends on your goal. If you need quick cash to cover an emergency, gig work can help—just know the pay is low and the taxes are real. If you're trying to build a business, gig work can be a stepping stone, but only if you're strategic about it. The single most important thing to remember is this: gig work is a job, not a lottery ticket. Treat it like a business, track your expenses, pay your taxes, and don't expect to get rich. The people who succeed are the ones who treat it seriously.

Sources

• Bankrate Side Hustles Survey (2024) - https://www.bankrate.com/credit-cards/news/side-hustles-survey-2024/
• Federal Reserve (SHED 2024, Employment and Gig Work) - https://www.federalreserve.gov/publications/2025-economic-well-being-of-us-households-in-2024-employment-and-gig-work.htm
• IRS (Gig Economy Tax Center) - https://www.irs.gov/businesses/gig-economy-tax-center
• UC Berkeley Labor Center (Gig Driver Pay, 2024) - https://laborcenter.berkeley.edu/release-gig-passenger-and-delivery-driver-pay-in-five-metro-areas/
• Quicken Side Hustle Survey (2024) - https://www.quicken.com/about-us/press/quicken-survey-43-percent-of-americans-earn-more-with-side-hustles-than-single-jobs/