Side Hustles Vs Part-Time Jobs: Which Makes More Cash?
If you're looking to (or need to) make a few extra dollars each month, you may be considering a side hustle or a part-time job on top of your full-time income. But which type of gig is best for you? Let's explore the differences between a side hustle and a part-time job and figure out what might be the best of each type to suit your needs.
What Is A Part-Time Job?
A part-time job is often one that people work between 10 and 30 hours per week. The IRS considers anyone working less than 30 hours per week to be employed part-time. Part-time jobs vary greatly in the number of hours you work and are often irregular, shift-based employment.
What Are The Tax Implications Of A Part-Time Job?
As mentioned, the IRS considers anyone working less than 30 hours per week to be working part-time. As far as personal income taxes are concerned, there are no significant differences between those working part-time and full-time.
What Are The Benefits Of A Part-Time Job?
In general, there are a number of benefits that are offered by part-time employment that aren't necessarily found in "side hustle" work. And not just the extra money you'll earn every month.
Guaranteed Income
If you get yourself the sort of part-time job that has a regular schedule, you'll have a guaranteed income every month alongside your "regular" 9-to-5 job. That's possibly an extra $100 to $200/month in your pocket, if not more.
Explore Different Industries
Whether you're considering a career change or not, working part-time for a business may allow you to explore industries that you previously hadn't considered. Furthermore, working part-time will allow you the flexibility to work in whatever industry appeals to you.
Pay Down Debts Faster
Even though you're working full-time, maybe your outgoing expenses don't allow you to put much towards your student loan debts or car payments. Working a part-time job with a regular set of hours can help you pay down your debts faster.
Insurance Benefits
Depending on your part-time position, you may qualify for benefits through your job that can include health insurance, life insurance, and other types of insurance benefits that you wouldn't find through a side hustle. Although you may not qualify for some of these as a part-timer, it's possible that you will in the long-run.
Retirement Savings Matching Benefits
If you're planning for your retirement and using your part-time income to supplement that retirement money into a savings account, it's possible that your employer may offer retirement savings matching. Check this with them during the hiring process to get yourself some extra money coming in when you finally retire.
Continuing Education Benefits
Many part-time jobs can also offer continuing education benefits, depending on your company. Do your research to see which part-time jobs that you're considering offer those types of benefits for their part-time employees.
Unemployment Benefits
If you work the maximum number of allowable hours as a part-time employee, you may qualify for part-time unemployment benefits. This can be useful if you've relied on your part-time income, which is then suddenly lost. Before you take just any part-time job, see which ones offer unemployment benefits.
Remote Work Opportunities
Depending on the type of part-time work you do, you may have the opportunity to work remotely, particularly in the fields of customer service representatives or creative fields like graphic design or various administrative positions. If you like the idea of working from home, a part-time opportunity may be exactly what you're looking for.
Opportunities To Learn New Skills
One of the great things about part-time jobs is that they can provide a platform to learn new skills. If you see a part-time opening for a job that sounds like it could teach you a skill you've always wanted to learn, consider applying! You're never too old/busy to learn a new skill—and what's better is that you'll be getting paid to do so!
Make New Friends
Even though you may love your coworkers at your regular job, having a second part-time job could allow you to meet new people and make new friends outside of the office. There's also the added bonus of two Christmas parties!
Downsides Of A Part-Time Job
As idyllic as it might seem to have a secondary income stream with new people, and trying a new skill in a new industry—with opportunities for further education—part-time jobs can come with their downsides, too. Let's briefly explore those.
On-Call Hours
Depending on the job you do, it's possible that you may need to be "on-call" for a certain number of hours or days of the week with your part-time position. This can limit your ability to do other things in your life. So, if you're applying for a part-time position, ensure that it offers hours that you can commit to being available for.
Lower Pay
While you're not taking a part-time job to make a comparable wage to your full-time position, you may be surprised at how low your entry wages will be when you first start at your new part-time job. Assess the rate of pay to see if it's commensurate with what's being asked of you. You always have your full-time position to fall back on.
What Is A Side Hustle?
Whereas part-time jobs are often as part of a company, side hustles are generally something that individuals do on their own time to earn extra money, alongside their full-time position. Side hustles can be almost anything, including starting your own small business.
What Are The Tax Implications Of Side Hustles
As you are taxed on your overall income, side hustles are still taxed by the IRS as income that you should declare on your annual tax returns. The only way you can avoid paying taxes on your side hustle is if you made less than $400 in net income for the year from it.
What Are The Benefits Of A Side Hustle?
Side hustles come with their own set of benefits which are different from that of a part-time job. Let's explore some of the benefits of side hustles.
Ability To Pursue Passion Projects
Perhaps you've always wanted to paint, draw, or pursue photography or graphic design. Maybe you've had a passion for these things, but haven't had the time (or inclination) to turn them into full-time jobs. With a side hustle, you can pursue your passion projects and earn a few extra dollars.
Test Entrepreneurial Waters
If you've always wanted to run your own business, then side-hustling might be a great way to test those waters. Even if you're just heading for weekend farmer's markets with your creative wares, such as art prints of your paintings or photographs, it's a great way to see if there's a market for your creative outlets.
Better Use Of Your Time
It may not always feel like it, but there are still 24 hours in a day. Most of your time may be spent at your full-time job—that is eight or nine hours a day. Meaning you have at least another six hours in your day that could be spent earning some extra income, or at the very least getting a creative outlet that makes you a few extra dollars at the farmer's market.
Bringing More Meaning To Your Work
One option for a side hustle is to do something that brings you more personal fulfillment. Find a local nonprofit organization or charity that's looking for someone to do their books, or looking for the occasional driver to deliver clothing to collection stations. By finding a side hustle that you care about, you'll make your life more meaningful.
Speak A Second Language? Consider Tutoring
If you speak a second language, it might be worth considering tutoring as a side hustle. While tutoring can occur online through a company, it can also be on a one-to-one basis in your town. Spanish, French, and German are among the most desirable second languages in America. Private tutoring costs generally start at $15/hour and can go up to $80/hour.
Tutoring Is A Great Option For Masters & PhDs
If you've trained in a certain subject and become certified at the University level, you could well be qualified to tutor high school students in your local area in a given subject, whether that's math, English, science—you could also charge more, between $30 and $100 per hour.
Work As A Contractor
Doing freelance writing or graphic design is an excellent side hustle, and by working as a contract employee (unlike part-time) you can often set your own hours and provide work on an ad-hoc basis, or get paid by the project. With a side hustle, you can work at your leisure.
Greater Work/Life Balance
Because you aren't working for a company (outside of your full-time position), you can afford a greater work/life balance. Some part-time positions require you to be on-call to come and take a shift at the drop of a hat—with a side hustle, that's often not the case and you can work at your own pace.
Downsides Of A Side Hustle
As great as all of this sounds, side hustles aren't all sunshine and rainbows. Let's explore some of the downsides of getting a side hustle going.
Spending Money To Make Money
Depending on your side hustle, you may need to spend money upfront in material costs to make the money back later, unlike a part-time job where everything is provided for you. Any sort of creative side hustle may require start-up materials like paper, pencils, paintbrushes, easels, or even outdoor yard work as a side hustle may require you to buy a lawn mower or grass trimmer. Don't go into debt doing your side hustle, but spend appropriately to get yourself up and running.
Return On Investment Could Be Low
While you're still growing as a small business, your return-on-investment may be lower than you expected. Ensure that you don't put all your eggs in one basket, in case your market research wasn't spot on and you make next to nothing in the initial phase of building up your side hustle clientele.
Man in Gray Crew Neck T-shirt Holding Black and Silver Hand Tool
Tax Filing Complications
Whereas with most full-time and part-time jobs, your employer will file your taxes for you, with a side hustle, you are responsible for filing your own taxes. Tax season is a huge headache whether you're employed fully or not, but adding an extra element of irregular financial income could complicate your tax filings even further.
Deemerwha studio, Shutterstock
Becoming Distracted At Your Regular Job
If you've decided to go all-in on your side hustle and really work on building it up into a small business, then it's possible you may become distracted from your full-time job by your side hustle. Take care to ensure this doesn't happen and compromise your full-time employment until, if and when, you're ready to make your side hustle your full-time gig.
Determining Your Worth
No matter what side hustle you choose, you may initially have a hard time putting a price tag on your work—whether that's your labor if you're mowing lawns, or if you're creating artwork, where figuring out how much that is worth can be a challenge. Determining your worth is all part of the game of having your own small business, but it's nice that full-time and part-time positions take all of that stress off you and pay you a wage.
One Side Hustle To Rule Them All?
If you're really looking for a side hustle as opposed to a part-time job, then one side hustle you may consider is dog walking. Just a couple of hours of your day devoted to walking Fido and Friends could net an extra $32,101 per year, according to data on the national average dog-walking salary. It's the perfect side hustle: you get outside, you get exercise, and you get to interact with dogs—sounds great!
