Best States for Side Hustles & Gig Income (2026)
Side hustle income faces a double tax hit: self-employment tax (15.3%) plus regular income taxes. While federal SE tax is the same everywhere, state income tax varies from 0% to 13.3%. This guide shows where side hustlers keep the most, factoring in both tax rates and cost of living.
- Mississippi ranks #1 with the lowest cost of living at 83.3.
- Hawaii ranks last at 193.3 — the highest among all states.
- The top 5 states are Mississippi, West Virginia, Kansas, Oklahoma, Alabama.
- All data is sourced from verified government databases and updated for 2026.
Top 3 States
All 50 States Ranked
Lowest to highest by cost of living
| # | State | Cost of Living | Top Tax Rate | Median Income | Calculator |
|---|---|---|---|---|---|
| 1 | Mississippi | 83.3 | 5.00% | $48,610 | Side Hustle Tax Calculator |
| 2 | West Virginia | 84.1 | 5.12% | $48,850 | Side Hustle Tax Calculator |
| 3 | Kansas | 86.3 | 5.70% | $64,521 | Side Hustle Tax Calculator |
| 4 | Oklahoma | 86.6 | 4.75% | $55,826 | Side Hustle Tax Calculator |
| 5 | Alabama | 88.1 | 5.00% | $56,929 | Side Hustle Tax Calculator |
| 6 | Arkansas | 89 | 4.40% | $52,528 | Side Hustle Tax Calculator |
| 7 | Tennessee | 89.7 | 0.00% | $56,071 | Side Hustle Tax Calculator |
| 8 | Missouri | 89.8 | 4.80% | $60,905 | Side Hustle Tax Calculator |
| 9 | Iowa | 90.1 | 3.80% | $65,573 | Side Hustle Tax Calculator |
| 10 | Kentucky | 90.3 | 4.00% | $55,573 | Side Hustle Tax Calculator |
| 11 | Indiana | 90.5 | 3.05% | $61,944 | Side Hustle Tax Calculator |
| 12 | Nebraska | 90.8 | 5.84% | $66,644 | Side Hustle Tax Calculator |
| 13 | Ohio | 90.8 | 3.50% | $58,642 | Side Hustle Tax Calculator |
| 14 | Louisiana | 91.1 | 4.25% | $52,295 | Side Hustle Tax Calculator |
| 15 | Michigan | 91.4 | 4.25% | $63,202 | Side Hustle Tax Calculator |
| 16 | North Dakota | 92.5 | 1.95% | $68,131 | Side Hustle Tax Calculator |
| 17 | South Dakota | 92.6 | 0.00% | $63,920 | Side Hustle Tax Calculator |
| 18 | Wisconsin | 93.3 | 7.65% | $67,125 | Side Hustle Tax Calculator |
| 19 | Georgia | 93.4 | 5.49% | $65,030 | Side Hustle Tax Calculator |
| 20 | Texas | 93.9 | 0.00% | $67,321 | Side Hustle Tax Calculator |
| 21 | New Mexico | 94.6 | 5.90% | $54,020 | Side Hustle Tax Calculator |
| 22 | South Carolina | 95 | 6.40% | $56,227 | Side Hustle Tax Calculator |
| 23 | North Carolina | 95.1 | 4.50% | $60,516 | Side Hustle Tax Calculator |
| 24 | Wyoming | 95.2 | 0.00% | $65,003 | Side Hustle Tax Calculator |
| 25 | Illinois | 96.4 | 4.95% | $72,205 | Side Hustle Tax Calculator |
| 26 | Minnesota | 96.8 | 9.85% | $77,706 | Side Hustle Tax Calculator |
| 27 | Idaho | 97.7 | 5.80% | $63,377 | Side Hustle Tax Calculator |
| 28 | Pennsylvania | 98.7 | 3.07% | $67,587 | Side Hustle Tax Calculator |
| 29 | Utah | 101.3 | 4.65% | $79,449 | Side Hustle Tax Calculator |
| 30 | Delaware | 101.5 | 6.60% | $72,724 | Side Hustle Tax Calculator |
| 31 | Montana | 101.6 | 5.90% | $60,560 | Side Hustle Tax Calculator |
| 32 | Arizona | 102.2 | 2.50% | $72,581 | Side Hustle Tax Calculator |
| 33 | Florida | 102.8 | 0.00% | $67,917 | Side Hustle Tax Calculator |
| 34 | Virginia | 103.7 | 5.75% | $80,615 | Side Hustle Tax Calculator |
| 35 | Nevada | 104.2 | 0.00% | $66,274 | Side Hustle Tax Calculator |
| 36 | Colorado | 105.1 | 4.40% | $82,254 | Side Hustle Tax Calculator |
| 37 | Rhode Island | 107.8 | 5.99% | $71,169 | Side Hustle Tax Calculator |
| 38 | Maine | 109.4 | 7.15% | $64,767 | Side Hustle Tax Calculator |
| 39 | Washington | 110.7 | 0.00% | $82,228 | Side Hustle Tax Calculator |
| 40 | New Hampshire | 112.6 | 0.00% | $83,449 | Side Hustle Tax Calculator |
| 41 | Connecticut | 112.8 | 6.99% | $83,771 | Side Hustle Tax Calculator |
| 42 | Oregon | 113.1 | 9.90% | $70,084 | Side Hustle Tax Calculator |
| 43 | Vermont | 114.5 | 8.75% | $65,792 | Side Hustle Tax Calculator |
| 44 | New Jersey | 115.2 | 10.75% | $89,296 | Side Hustle Tax Calculator |
| 45 | Maryland | 115.4 | 5.75% | $90,203 | Side Hustle Tax Calculator |
| 46 | New York | 123.8 | 10.90% | $74,314 | Side Hustle Tax Calculator |
| 47 | Alaska | 125.9 | 0.00% | $77,790 | Side Hustle Tax Calculator |
| 48 | Massachusetts | 135 | 9.00% | $89,645 | Side Hustle Tax Calculator |
| 49 | California | 142.2 | 13.30% | $91,905 | Side Hustle Tax Calculator |
| 50 | Hawaii | 193.3 | 11.00% | $84,857 | Side Hustle Tax Calculator |
Methodology
How we collected and ranked the data
States are ranked by cost of living index (ascending), since low cost of living amplifies the value of side hustle income. Combined with state tax rates, this reveals where gig income stretches furthest. States with no income tax AND low COL are optimal. Data from BLS, IRS, and Tax Foundation.
Frequently Asked Questions
How much tax do I pay on side hustle income?
Side hustle income is subject to 15.3% self-employment tax (Social Security + Medicare) plus federal income tax (typically 22-32% for most workers) plus state income tax (0-13.3%). Total effective rates range from 30-45% before deductions. Deducting business expenses reduces your tax base.
Do I need to report side hustle income under $600?
Yes. All self-employment income over $400 must be reported on your tax return, regardless of whether you receive a 1099. The $600 threshold only determines whether the payer must issue a 1099 form — your obligation to report is based on the $400 threshold.