Life’s not cheap. Rentโs high, groceries feel like a luxury sometimes, and most of us could use a little extra income to breathe easier. Thatโs where the side hustle comes in.
Whether you’re delivering food between classes, building websites after your 9-to-5, or selling resin art on Instagram, side gigs are how many Canadians are covering gaps, building savings, or funding passions that a single paycheck just doesnโt stretch to.
But when money starts coming in, thereโs a quiet, less exciting side to the hustle: taxes. Specifically, the Canada Revenue Agency (CRA) wants to know what youโre up toโand yes, even if it’s โjust a few hundred bucks a month.
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ToggleWhat Counts as a Side Hustle (From CRA’s Point of View)
If youโre earning money that isnโt from a traditional employer (i.e., no T4 slip at the end of the year), then as far as the CRA is concerned, youโre self-employed. It doesnโt matter if itโs full-time, part-time, once in a while, or a consistent side business.
- Freelancing (design, writing, consulting, tutoring, codingโyou name it)
- Selling physical goods (handmade items, resale goods, vintage clothing)
- Gig work (Uber, DoorDash, TaskRabbit, pet sitting, etc.)
- Content creation (if you earn money via sponsorships, ads, or tips)
- Renting property (Airbnb or long-term rentals)
- Coaching or instructing (yoga, music lessons, personal training)
If youโre paid directly by clients or customers, and not by an employer deducting taxes on your behalf, youโre running what the CRA sees as a business.
It doesn’t matter if you don’t think of it as one. The CRA does.
Soโฆ Do You Have to โRegisterโ It?
Here’s where the nuance comes in. There are a few types of โregistrationโ that could apply depending on your income and setup.
1. Business Name Registration (Maybe)
If youโre using your own legal name, say youโre invoicing clients as โEmily Chanโโyou typically donโt need to register a business name. But if youโre operating under a name like โChan Creativeโ or โNorth Shore Tutoring,โ your province or territory may require you to register that business name. Thatโs a local government requirement, not federal.
Each province has slightly different rules on registering a sole proprietorship or business name, so it’s worth checking your provincial business registry. And no, itโs not just for big companies, it applies even if youโre making earrings at your kitchen table and selling them online under a brand name.
2. CRA Business Number (Usually Noโฆ Until You Hit $30K)
Hereโs the one that gets people: registering a Business Number with the CRA. If you’re just doing casual side work and making under $30,000 in revenue (not profitโmore on that in a sec), you generally don’t need to register a business number or charge GST/HST.
But once your total gross revenue across all side gigs crosses $30,000 over four consecutive calendar quarters, the CRA considers you a โsmall supplierโ no more. At that point, youโre legally required to register for a GST/HST account, start collecting sales tax on applicable goods/services, and send it to the government.
Even if youโre not making much profit, hitting that $30K threshold means itโs time to register. The CRAโs tracking your revenue, not your take-home.
Here’s how the CRA frames it:
Your Total Side Hustle Revenue (Last 12 Months) | Need to Register for GST/HST? |
$0 โ $29,999.99 | Not required |
$30,000 or more | Required |
Letโs say you make $18K freelancing and $13K reselling sneakers. Even if the gigs are totally unrelated, if youโre not incorporated, that $31K total revenue tips you over the edge. Time to register.
Reporting Income from Your Side Hustle
Whether you need to register for GST/HST or not, you still need to report your income to the CRA. Thatโs a must. Every dollar you earn through your side hustle should be declared on your personal tax return. The form youโll use? Itโs called T2125 โ Statement of Business or Professional Activities.
You include this form along with your usual T1 tax return (the one most Canadians file every spring).
- What kind of business youโre running
- How much money you made (gross income)
- What you spent to earn it (expenses)
- Whatโs left after costs (net income)
You pay income tax on your net profit, not the gross. Thatโs good news.
What Can You Write Off?
One of the best parts of having a side hustle is the tax deductions. If you’re not claiming expenses, youโre overpaying on taxes.
Letโs say you made $10,000 doing photography gigs, and you spent $3,000 on camera gear, editing software, memory cards, gas to get to shoots, and a bit of advertising. You only pay tax on the remaining $7,000.
- Equipment and supplies (laptops, tools, materials)
- Home office costs (portion of rent, utilities, internet)
- Phone or internet (if used for business)
- Advertising and marketing
- Professional development (courses, certifications)
- Vehicle expenses (if used for business)
- Accounting or legal fees
Some costs, like meals or entertainment, have special limits (usually only 50% deductible). And capital expenses, like a laptop or camera, often need to be claimed gradually over a few years as depreciation. Donโt just guess check what counts in your specific situation, or talk to an accountant.
Letโs say you wrote a post about the best fast payout casinos in Canada, like the ones listed on bonus.ca, and earned affiliate income from it. Thatโs business income in the eyes of the CRA, and any associated costs, like hosting fees or even software you use to edit your content, could potentially be written off. Again, it all depends on how closely those expenses tie back to your hustle.
What About Taxes? When and How Do You Pay?
If youโve only worked salaried jobs before, tax season probably meant uploading a T4 to TurboTax and waiting for a refund. With side hustle income, things change.
No oneโs withholding tax from your side hustle payments. So, unless you plan ahead, you could be in for a nasty surprise come spring.
Hereโs a simple way to handle it: every time you get paid, set aside a chunk, between 25% and 35%, depending on your total income level and province. That way, when tax season rolls around, youโre not scrambling.
Estimating What You Owe
Your tax rate depends on how much youโre earning in total (your job + your side gig), and what province you live in.
Letโs look at a basic example:
- You earn $70,000 at your day job.
- You earn $15,000 net from your side gig (after expenses).
- You live in Ontario.
Your day job already puts you in the 20.5% federal bracket and the 9.15% Ontario provincial bracket. So your marginal tax rate is roughly 29.65%. Thatโs what youโll pay on additional income like your side hustle.
If your net side hustle income is $15,000:
$15,000 x 0.2965 = $4,448 owed in tax
Now imagine if you didnโt set any of that money aside throughout the year. That could hurt.
If your total self-employed income is high enough, the CRA may eventually ask you to start paying your taxes in installments four times a year. Until then, youโre generally okay paying annually, but only if you plan for it.
Do You Have to Correct Past Returns If You Forgot to Report Side Hustle Income?
Yep. If you forgot to report side hustle income on past tax returns, itโs not the end of the world, but itโs something you should fix sooner rather than later.
The CRA has a program called the Voluntary Disclosures Program (VDP). If you come forward before they catch the mistake, you may be eligible for penalty relief, or even interest relief, depending on the situation.
- Log into your CRA My Account and request a change online.
- Use the ReFILE option through the tax software you originally used.
- Mail in a T1 Adjustment Request with your revised numbers and receipts.
If you wait and the CRA finds the discrepancy themselves, the penalties can be stiffโup to 10% of the unreported income, plus interest.
GST/HST and Side Hustles: What You Need to Know
Once youโre making over $30,000 in total self-employed revenue, registering for GST/HST isnโt optional. Itโs mandatory.
- Register for a GST/HST number
- Charge GST or HST on your services or goods (depending on where your clients/customers are)
- Remit that tax to the CRA
- File a GST/HST return annually (or more often, depending on revenue)
Charging the Right Tax Rate
The rate you charge depends on your location and where your customers are. Canadaโs a bit tricky here, since some provinces harmonize their sales tax into HST (a single rate), while others donโt and still use a split of GST + PST.
Here’s a quick snapshot:
Province/Territory | Sales Tax Charged | Total Rate |
Alberta, Yukon, NWT, Nunavut | GST only | 5% |
B.C., Manitoba, Saskatchewan | GST + PST | Varies (7โ8%) |
Ontario | HST | 13% |
Atlantic provinces | HST | 15% |
Quebec | GST + QST | 14.975% |
If youโre based in Ontario and sell to someone in Nova Scotia, you charge 15% HST. If youโre in Alberta, itโs just 5% GST.
Also: If youโre selling digital goods or services to customers outside Canada, you typically donโt need to charge GST/HST at all. But if your buyers are in Canada? Tax applies.
Should You Register for GST/HST Voluntarily?
Hereโs a cool trick: even if youโre under $30K, you can choose to register voluntarily. Why would anyone do that?
Because once youโre registered, you can claim back the GST/HST you pay on business purchases (called Input Tax Credits). That means if you buy a new laptop, website hosting, or supplies for your hustle, you can reclaim the sales tax paid.
Itโs a bit of extra paperwork, yes, but it can lower your costs if your hustle involves a lot of expenses.
Final Thoughts
Side hustles are awesome. They help people bridge financial gaps, build creative outlets, and move toward more flexible work lives. But they also come with new responsibilities.
The CRA isnโt out to crush your dream, but they do expect you to play by the rules once money is involved.