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Lesson 6 of 8 · 14 min

Tax basics for employees and side income

How income tax generally works, marginal vs effective rates, taxes on side income, and the records worth keeping. Education only.

In this lesson you will

  • Explain gross vs net income
  • Understand marginal and effective tax rates
  • Know why side income often needs its own tax set-aside
  • Keep the records that make tax time easier

Education, not advice. This lesson explains general ideas and does not consider your personal situation.

A note on countries

Tax rules differ completely between countries, and change regularly. This lesson explains common concepts that appear in many systems, so official guidance becomes easier to understand. Always check your own tax authority's guidance or speak to a qualified tax professional.

Gross vs net

  • Gross income: what you earn before anything is taken off.
  • Net income: what arrives in your account after tax and other deductions.

Budgets should always be built on net income, because that is the money you can actually spend.

Level 3: Building Financial Resilience

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  1. 1How compound growth works15 min · Free
  2. 2Inflation and real value13 min
  3. 3Measuring your financial health14 min
  4. 4Investing concepts: risk, return and diversification16 min
  5. 5Retirement saving concepts14 min
  6. 6Tax basics for employees and side income14 min
  7. 7Big purchases and loan maths16 min
  8. 8Run your money like a business15 min

Budash Academy and the Budash blog are for general education only. They are not financial, investment, tax or legal advice, and they do not take your personal circumstances into account. For advice, speak to a qualified, regulated professional.