Step 12 is for side income. Enter gross side income, set a tax holdback, and let the app add the net amount to the cash available for the final allocation steps.
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Side Income captures gross extra income earned for this income deposit, plus a tax holdback percentage (default 25-30%). The app subtracts the holdback and shows you the net that's actually available to spend or allocate.
Planned discretionary spending now starts in Budget Focus (Step 7). If side income gives you extra room, you can still send it to lifestyle in the Finish Line step.
Heads up
Self-employment tax in the US is roughly 15.3% on top of income tax. Canadian freelancers owe both CPP and income tax. A 25% holdback is a floor, not a ceiling. Check with an accountant if your hustle income is significant.
Tip
Opening a separate savings account for the tax holdback makes year-end painless. Auto-transfer the holdback amount each time a gig invoice clears.
Step 10 lets you choose Snowball or Avalanche. Both use the same monthly budget — only the order of attack differs.
The Emergency Fund step sets your emergency fund target and tells Payday Audit how much to allocate each income deposit.
Step 9 helps you track workplace investing and employer match amounts that are already handled before your take-home income arrives.