Side gigs and platform income

Money you earn through an app or website is taxable, whether it comes from driving, deliveries, selling goods or short-term rentals. Report it, keep records of what you earn and spend, and check whether you have to charge GST/HST. Ride-sharing drivers have to register as soon as they start.

Reporting the income

If you earn money through digital platforms, you may be self-employed and carrying on a business. The CRA describes a business as an activity you intend to carry on for profit, with evidence to support that intention, and income from a service business is business income. Its platform guidance covers, for example:

• Commercial ride-sharing: report all of it, including tips, however much or little you drive.
• Selling goods to buyers through online marketplaces: report it as self-employment income.
• Gig work, such as freelance tasks or food delivery you take on through an app or online platform: report it as self-employment income.

Report the income on Form T2125, Statement of Business or Professional Activities, with a separate T2125 for each business. As a resident of Canada, you report income from all sources worldwide, including business you do outside Canada. If your gig is incorporated, the corporation files its own T2 return.

Short-term rentals

Renting out all or part of a property through a platform is taxable. If you provide only basic services, such as heat, utilities, parking and laundry facilities, it’s usually rental income, reported on Form T776, Statement of Real Estate Rentals. If you add services such as meals, cleaning or security, it may be business income, reported on Form T2125; the more services, the more likely it’s a business.

You can generally deduct reasonable expenses, but for income earned after 2023 you can’t deduct any expenses for a short-term rental that isn’t allowed where it’s located or that doesn’t meet all provincial and municipal operating, registration, licensing and permit rules. If you rent out part of your home, claim only the rented part’s share of shared costs, on a reasonable basis such as floor area and the days it was rented. See renting out part of your home.

GST/HST

• Ride-sharing. GST/HST applies to every commercial ride-sharing fare, and you have to register as soon as you start earning; the small supplier threshold doesn’t apply. The app may collect your fares, but charging and remitting the tax is still your job.
• Other gigs, sales and rentals. Generally, you have to register once your taxable sales go over $30,000 over four calendar quarters. Below that, registering is optional, but it lets you claim input tax credits. See do I need to register for GST/HST?
• Both. If you drive for a ride-sharing app and have other taxable sales, such as deliveries, and the total stays under the threshold, your registration generally covers only the ride-sharing unless you ask otherwise. Over the threshold, you charge GST/HST on all of it.
• Short stays. Rentals with continuous occupancy of less than a month are subject to GST/HST; rentals of residential premises for a month or more are exempt.

In Quebec, Revenu Québec administers the GST and the Quebec sales tax (QST), and an accommodation business may also have to register for the tax on lodging.

What platforms report to the CRA

Platform operators have to collect information about many of their sellers and report it to the CRA every year. If you’re a reportable seller, that includes your name, address, date of birth and tax number (such as your SIN or business number), what you were paid in each calendar quarter, the number of sales or services, and the fees and commissions the platform kept. For rentals, it includes each property’s address. Your platform has to give you a copy of what it reported by January 31.

Expect your platforms to ask for this information. If you don’t give them your tax number, the CRA may charge you a penalty.

Expenses you can deduct

As a self-employed person, you can claim eligible expenses, as long as you keep proper records. For platform work they include:

• fees or charges the platform keeps
• marketing to bring more visitors to your online store
• materials and services bought in or outside Canada, such as raw materials (wood, wool, paint, beads), software licences, or editing and translation

For other common costs, such as the business share of a vehicle or phone, see what can I deduct as a self-employed person?

CPP and missed income

If you’re over 18, work outside Quebec and earn more than $3,500 a year, you contribute to the Canada Pension Plan, and as a self-employed person you pay both the employee and employer shares on your return. Quebec residents contribute to the Quebec Pension Plan instead. See CPP for the self-employed.

If you didn’t report platform income in past years, you may owe penalties and interest on top of the tax. Fixing it voluntarily may reduce or avoid them: you can change past returns, or apply to the Voluntary Disclosures Program, which grants relief case by case if you come forward before the CRA contacts you.

In short

• Platform income is taxable; ride-sharing, online selling and most other gig income go on Form T2125.
• Ride-sharing drivers register for GST/HST from the start; others generally register once sales pass the small supplier threshold.
• Platforms report your earnings to the CRA and send you a copy by January 31.