# How to Start Charging for a Side Project While You Have a Day Job
> Taking your first payment with a day job: check your contract, choose Stripe or a merchant of record, sell one plan, keep records and set calm refund rules.

```yaml
url: "https://sidehunt.io/studio/how-to-start-charging-for-a-side-project-with-a-day-job"
markdown: "https://sidehunt.io/studio/how-to-start-charging-for-a-side-project-with-a-day-job.md"
title: How to Start Charging for a Side Project While You Have a Day Job
slug: how-to-start-charging-for-a-side-project-with-a-day-job
category: Growth
tags:
  - side projects
  - monetization
  - payments
  - pricing
  - indie
published_at: "2026-10-05T10:59:25.904Z"
updated_at: "2026-10-05T10:59:25.919Z"
featured_image: "https://txmhk1zrnc.ufs.sh/f/xSkWTCqmKWx94Pokr4dYk9MQ6GatIoxndeHPK1Rm8U3jzq0r"
```

## Article

Someone finally says it: "I'd pay for this." For a side project built on weeknights, that sentence feels like the finish line. Then you open a payments dashboard at 11pm and the questions pile up. Is your employer okay with this? Who handles sales tax? Where does the money go? What happens when someone wants a refund on a Tuesday while you're stuck in meetings?

This guide is about that plumbing. It isn't about how much to charge (if that's your question, read [how to price your first SaaS when you have almost no data](https://auraplusplus.com/studio/how-to-price-your-first-saas-when-you-have-almost-no-data)), and it isn't about finding buyers (that's covered in [how to find paying customers for a side project without quitting your job](https://sidehunt.io/studio/how-to-find-paying-customers-for-a-side-project-without-quitting-your-job)). It's about taking money safely, in a way you can actually maintain with a day job.

One honest note: nothing here is legal or tax advice. Rules differ a lot by country, state and employer. The aim is to show you which questions to ask and which documents to read, so any chat with HR, a lawyer or an accountant is short and cheap.

## What should you check in your employment contract before you charge?

Before you take a single payment, read the actual clauses in your employment contract and staff handbook that cover outside work and intellectual property. Not a forum summary: the words your employer wrote. Charging is often the moment a hobby starts to look like a business, and some contracts treat the two differently.

### The clauses worth finding

- Outside work or moonlighting. Some employers allow it freely, some ask you to declare it, and some require written approval. Look for words like "outside employment," "other business interests" or "conflict of interest."
- IP or invention assignment. This is the big one. Some clauses say the company owns things you create while employed, sometimes even on your own time. Check how broadly yours is written and whether it mentions work related to the company's business.
- Confidentiality and non-compete. If your side project touches your employer's market, customers or internal knowledge, these clauses matter more.

![](https://txmhk1zrnc.ufs.sh/f/xSkWTCqmKWx982NqfqhCQxFM4faKU8AmpBgzdjhtGIicE602)

Local law can also shape how far these clauses reach. As one example, [California Labor Code section 2870](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2870) limits invention-assignment clauses for things an employee builds entirely on their own time without the employer's equipment or trade secrets, with exceptions for inventions that relate to the employer's business or come from work done for the employer. That's one state's rule. Yours may be very different, which is exactly why reading your own clause matters.

### Habits that keep things clean

- Build on your own laptop and your own email, code and cloud accounts. Never on work devices or work time.
- Don't use anything you learned confidentially at work, like customer lists or internal tools.
- Stay out of your employer's market if you can. A meal-planning app is a very different conversation from a competitor to your company's product.

### When to ask HR or a lawyer

Ask HR if your policy says outside work needs approval or declaration. Getting approval in writing beats worrying about it for years. Talk to an employment lawyer if the IP clause is broad, if your project is anywhere near your employer's business, or if you're unsure what a clause means. Bring the exact text; a short consultation on one or two clauses is usually enough.

## Should you use Stripe directly or a merchant of record?

If you're selling to individuals across many countries and don't want to handle sales tax and VAT yourself, a merchant of record is usually the calmer place to start. If you mostly sell in one country or want the lowest per-sale fee, a direct processor like Stripe can make more sense.

### What a merchant of record actually does

A merchant of record (MoR) is the business that legally sells to your customer. With an MoR, your customer technically buys from the provider, and the provider pays you. Lemon Squeezy's [explanation of the merchant of record model](https://docs.lemonsqueezy.com/help/payments/merchant-of-record) puts it plainly: the MoR is responsible for collecting sales tax, processing refunds and chargebacks, and PCI compliance.

Paddle's [guide to what a merchant of record is](https://www.paddle.com/blog/what-is-merchant-of-record) adds a detail worth knowing early: because the MoR is the seller, its name is what appears on the customer's card statement. Tell customers that on your checkout or receipt page, so nobody disputes a charge they don't recognise.

With a direct processor, you are the seller. The processor moves the money, and working out where you owe sales tax or VAT, registering, collecting and filing is on you. Stripe sells tax tools to help with that, but the responsibility stays yours.

### What it costs (checked on 5 October 2026)

- [Stripe's pricing page](https://stripe.com/pricing) (US version) lists 2.9% + 30¢ per successful domestic card transaction. Rates differ by country, and tax tools are extra.
- [Paddle's pricing page](https://www.paddle.com/pricing) lists 5% + 50¢ per checkout transaction, with tax remittance included.
- [Lemon Squeezy's pricing page](https://www.lemonsqueezy.com/pricing) lists 5% + 50¢ per transaction and notes some payments may carry additional fees.
- [Polar's pricing page](https://polar.sh/resources/pricing) lists a free Starter plan at 5% + 50¢, paid plans with lower rates, and a surcharge for non-US cards.

Prices change, so check the pages again on the day you sign up. And watch the fixed part of each fee: on a low monthly price, that 30¢ or 50¢ is a bigger slice than the percentage suggests.

So the trade-off: an MoR costs more per sale and gives you a bit less control. In return, one company handles tax across countries, refunds, chargebacks and billing questions. Polar's [comparison of payment processors and merchants of record](https://polar.sh/docs/merchant-of-record/introduction) is a fair read on it. For someone with a day job, buying back evenings is often worth a couple of extra percent. Stripe's pricing page now also lists its own merchant-of-record option, Managed Payments, so the line is blurring.

## What's the simplest first offer to sell?

Sell one plan, at one price, through a hosted checkout or payment link. Don't write billing code yet.

Your first customers don't need three tiers and an annual toggle. They need a clear sentence about what they get and a safe link to pay. All four providers above offer hosted checkouts, so you never build a payment form. [Stripe's Payment Links documentation](https://docs.stripe.com/payment-links) describes no-code links that run on a Stripe-hosted page, support subscriptions, and come with automatic receipts and no-code refunds.

- One plan. Monthly is easiest to support and easiest to refund.
- One sentence of value. "Plan your whole growing season in one place" beats a list of twelve features.
- Manual unlock is fine. If wiring payments to accounts would eat a weekend, switch the first few customers on by hand.
- A clear thank-you page. Say what happens next and when, especially if you unlock access by hand.

Buy it yourself before you share the link, then refund it. You'll catch the confusing receipt or broken redirect before a customer does.

## What business basics do you need before the first payment?

You need three things before the first payment lands: a place for the money that isn't your personal spending account, a simple record of every sale and cost, and a rough idea of how side income is taxed where you live.

### Keep the money separate

Open a separate bank account for the project, even if it's just a second personal account in the beginning. Send payouts there and pay the domain, hosting and tools from there. At tax time you won't be hunting through grocery receipts for the email provider charge.

### Keep boring records from day one

A spreadsheet is fine: date, customer or order ID, amount, fees, refunds, payout, and every expense with the receipt saved in one folder. Export your payout reports from the payment provider every month. It takes ten minutes and saves a miserable weekend later.

![](https://txmhk1zrnc.ufs.sh/f/xSkWTCqmKWx9IlLXLNEi5Y6NHgPuCynK0AXcDefrF4UlamIO)

### Tax on side income

Side income is usually taxable, and the rules depend entirely on where you live. Two examples. The IRS [gig economy tax center](https://www.irs.gov/businesses/gig-economy-tax-center) says income from part-time or side work must be reported on a tax return, even when you don't receive a form like a 1099. In the UK, HMRC's guidance on [the £1,000 trading allowance](https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income) explains that you must register for Self Assessment if your gross trading income goes over £1,000 in a tax year, that you must keep records of the income, and that the allowance can't be used for income from your own employer.

One thing people mix up: a merchant of record handles sales tax and VAT on your sales, not your own income tax. Polar's documentation says so directly: you're always responsible for your own income tax in your country of residence.

Wherever you live, book an hour with an accountant who works with freelancers or small online businesses. Ask three questions: do I need to register anything, what should I set aside for tax, and when do I need a separate business entity. Moving a fixed share of every payout into savings is a common habit that keeps tax season from becoming a surprise.

## How should you handle refunds, cancellations and support on evenings?

Write a short, generous refund policy, make cancelling self-serve, and promise a support response time you can actually keep with a day job.

### Refunds: be kind and quick

Early on, a quick yes to a refund is nearly always cheaper than an argument. A customer who can't reach you may go to their bank instead, and disputes cost money: Stripe's US pricing page lists a $15 fee for each dispute received, and Polar's pricing page lists $15 per dispute. Stripe also notes that processing fees from the original payment aren't returned when you refund. A clear policy like "Not happy in the first 14 days? Reply to your receipt and I'll refund you, no questions" removes most of the friction.

### Cancellations: never make people email you

If someone has to write in and wait until your evening to cancel, some may dispute the charge instead. Use the provider's self-serve tools. Stripe's [hosted customer portal](https://docs.stripe.com/no-code/customer-portal) lets customers manage their subscriptions, billing details and invoices through a login link, even if you don't have a website; merchants of record provide their own customer-facing billing pages. Put the cancel link in your footer and in every receipt.

### Support: one inbox, one honest promise

- Use a dedicated address on your domain, such as [support@yourproduct.com](mailto:support@yourproduct.com), not your personal email.
- State the response time on your site: "I'm a solo maker with a day job. I reply within one working day, usually in the evening."
- Keep three saved replies: refund done, how to cancel, and a "thanks, I'm looking into it."
- When card payments start failing on subscriptions, a few plain human emails go a long way. This walkthrough of [failed payment emails when you have under 50 customers](https://dev.to/posting-dude/failed-payment-emails-when-you-have-under-50-customers-2cdk) shows a simple three-email loop.

## What does this look like for a real side project? (An invented example)

**Everything in this example is made up: the person, the product and the numbers.** Priya is a backend developer at a logistics company. On weekends she builds Furrowly, a planner that helps home gardeners plan what goes in each raised bed through the season. Twenty people on her gardening forum say they'd pay.

First, she reads her contract. The outside-work clause asks staff to declare other business interests, and the IP clause covers work "related to the company's business." Gardening software has nothing to do with logistics, but she declares it to HR anyway and gets a one-line approval email, which she saves.

Next, she picks a merchant of record because her forum friends live in several countries and she doesn't want to learn VAT rules on a Sunday. She sets up one plan at an illustrative $6 a month, creates a hosted checkout, buys it herself, and refunds it.

Here's her rough fee maths, using the rates listed on the pricing pages above and ignoring extra charges for international cards or currency conversion. If all twenty subscribe, that's $120 a month. At 5% + 50¢, each $6 charge costs 80¢, so about $16 a month in fees. At Stripe's US card rate of 2.9% + 30¢, each charge would cost about 47¢, or roughly $9.50 a month, but Priya would be the seller and handle tax herself. She decides the roughly $6.50 a month difference is a fair price for not doing that. She also notices that 80¢ is over 13% of a $6 sale, and makes a note to revisit her price later.

Finally, she opens a second bank account for Furrowly payouts, starts a one-tab spreadsheet, adds a 14-day refund line and a cancel link to the footer, and sets up support@ on her domain with a "replies within one working day" note.

## What should you set up this weekend?

You can do the whole setup in a weekend if you keep it this small:

- Find and read the outside-work, IP and confidentiality clauses. Ask HR or a lawyer if anything is unclear.
- Choose a direct processor or a merchant of record using the trade-off above.
- Create one product, one price, one hosted checkout.
- Buy it yourself, check the receipt and thank-you page, then refund yourself.
- Open a separate account for payouts and start your records sheet.
- Write a short refund and cancellation policy and turn on self-serve cancelling.
- Set up a support address and saved replies.
- Note one question for an accountant and book the call.

### The first 14 days after you start charging

- Days 1 to 2: the weekend checklist above.
- Days 3 to 5: send the checkout link personally to the people who said they'd pay.
- Days 6 to 8: unlock access by hand within your promised time. Fix whatever confused the first buyers.
- Days 9 to 11: check your sheet against the provider's dashboard. Every sale, fee and refund should match.
- Days 12 to 14: talk to the accountant, move your tax share into savings, and decide whether any of the manual steps now hurt enough to automate.

## What traps catch employed founders when they start charging?

- Building custom billing first. Weeks spent on plans, upgrades and webhooks before anyone has paid. Use hosted checkout until manual work actually hurts.
- Ignoring the contract. Assuming "it's my own time" settles everything. Read the clause.
- Mixing personal and project money. It makes taxes painful and hides whether the project is profitable.
- Selling annual plans too early. Annual money upfront feels great, but it's a year of promised support. If you might pause the project, stay monthly for now.
- Hiding the cancel button. It invites disputes and bad word of mouth.
- Promising instant support. You have a job. Promise what you can keep.
- Forgetting income tax because "the MoR handles tax." It handles sales tax, not yours.

Taking your first payment should feel like a small, calm milestone, not a legal thriller. Read the clause, pick the payment setup that saves you the most evenings, sell one simple thing, and keep the records boring. Once it's working, [SideHunt](https://sidehunt.io) is a friendly place to launch your side project and find the next people who'll say "I'd pay for this."

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