[batmaniam]

Just keep in mind that you worked on this side project on your own time. To then let the employer just take it means you've just given them free labor without them paying for the time you've put in.

Personally I would keep it as a side project, or like others have said, tell them you're willing to sell it for an amount you are comfortable with.

Either way, make sure you're rewarded in some way. Don't let them guilt you into giving it to them. Stay strong!