Do You Have to Register a Side Hustle with the CRA?

Canadian maple leaf overlay on U.S. currency, symbolizing Canadian tax regulations and income

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Life’s not cheap. Rentโ€™s high, groceries feel like a luxury sometimes, and most of us could use a little extra income to breathe easier. Thatโ€™s 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 doesnโ€™t stretch to.

But when money starts coming in, thereโ€™s a quiet, less exciting side to the hustle: taxes. Specifically, the Canada Revenue Agency (CRA) wants to know what youโ€™re up toโ€”and yes, even if it’s โ€œjust a few hundred bucks a month.

What Counts as a Side Hustle (From CRA’s Point of View)

If youโ€™re earning money that isnโ€™t from a traditional employer (i.e., no T4 slip at the end of the year), then as far as the CRA is concerned, youโ€™re self-employed. It doesnโ€™t matter if itโ€™s full-time, part-time, once in a while, or a consistent side business.

This can include:

  • Freelancing (design, writing, consulting, tutoring, codingโ€”you 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 youโ€™re paid directly by clients or customers, and not by an employer deducting taxes on your behalf, youโ€™re running what the CRA sees as a business.

It doesn’t matter if you don’t think of it as one. The CRA does.

Soโ€ฆ Do You Have to โ€œRegisterโ€ It?

A glass jar filled with Canadian pennies and coins scattered on a wooden surface, symbolizing small earnings or savings
In Canada, you must report all income to the CRAโ€”even from small side hustlesโ€”if you’re earning money regularly.

Here’s where the nuance comes in. There are a few types of โ€œregistrationโ€ that could apply depending on your income and setup.

1. Business Name Registration (Maybe)

If youโ€™re using your own legal name, say youโ€™re invoicing clients as โ€œEmily Chanโ€โ€”you typically donโ€™t need to register a business name. But if youโ€™re operating under a name like โ€œChan Creativeโ€ or โ€œNorth Shore Tutoring,โ€ your province or territory may require you to register that business name. Thatโ€™s 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, itโ€™s not just for big companies, it applies even if youโ€™re making earrings at your kitchen table and selling them online under a brand name.

2. CRA Business Number (Usually Noโ€ฆ Until You Hit $30K)

Hereโ€™s 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 profitโ€”more 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 โ€œsmall supplierโ€ no more. At that point, youโ€™re 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 youโ€™re not making much profit, hitting that $30K threshold means itโ€™s time to register. The CRAโ€™s 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

Letโ€™s say you make $18K freelancing and $13K reselling sneakers. Even if the gigs are totally unrelated, if youโ€™re not incorporated, that $31K total revenue tips you over the edge. Time to register.

Reporting Income from Your Side Hustle

Close-up of a U.S. one-dollar bill featuring George Washington, symbolizing taxable income
In the U.S., if you earn $400 or more from self-employment, you’re generally required to file and pay self-employment tax

Whether you need to register for GST/HST or not, you still need to report your income to the CRA. Thatโ€™s a must. Every dollar you earn through your side hustle should be declared on your personal tax return. The form youโ€™ll use? Itโ€™s 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).

It asks for details like:

  • What kind of business youโ€™re running
  • How much money you made (gross income)
  • What you spent to earn it (expenses)
  • Whatโ€™s left after costs (net income)

You pay income tax on your net profit, not the gross. Thatโ€™s 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, youโ€™re overpaying on taxes.

Letโ€™s 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.

Common deductible expenses include:

  • 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. Donโ€™t just guess check what counts in your specific situation, or talk to an accountant.

Letโ€™s 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. Thatโ€™s 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 youโ€™ve 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 oneโ€™s withholding tax from your side hustle payments. So, unless you plan ahead, you could be in for a nasty surprise come spring.

Hereโ€™s 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, youโ€™re not scrambling.

Estimating What You Owe

Your tax rate depends on how much youโ€™re earning in total (your job + your side gig), and what province you live in.

Letโ€™s look at a basic example:

Scenario:

  • 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%. Thatโ€™s what youโ€™ll 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 didnโ€™t 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, youโ€™re 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?

Rolls of U.S. dollar bills symbolizing unreported income and tax corrections
The IRS allows you to file an amended return (Form 1040-X) if you forgot to report income on a previous tax return

Yep. If you forgot to report side hustle income on past tax returns, itโ€™s not the end of the world, but itโ€™s 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.

To fix a return, you can:

  1. Log into your CRA My Account and request a change online.
  2. Use the ReFILE option through the tax software you originally used.
  3. 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 stiffโ€”up to 10% of the unreported income, plus interest.

GST/HST and Side Hustles: What You Need to Know

Once youโ€™re making over $30,000 in total self-employed revenue, registering for GST/HST isnโ€™t optional. Itโ€™s mandatory.

At that point, youโ€™re expected to:

  • 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)
Pink piggy bank surrounded by Canadian coins, symbolizing side hustle savings and tax responsibilities
In Canada, if your side hustle earns over $30,000 in gross revenue in a year, you’re required to register for a GST/HST number

Charging the Right Tax Rate

The rate you charge depends on your location and where your customers are. Canadaโ€™s a bit tricky here, since some provinces harmonize their sales tax into HST (a single rate), while others donโ€™t 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 (7โ€“8%)
Ontario HST 13%
Atlantic provinces HST 15%
Quebec GST + QST 14.975%

If youโ€™re based in Ontario and sell to someone in Nova Scotia, you charge 15% HST. If youโ€™re in Alberta, itโ€™s just 5% GST.

Also: If youโ€™re selling digital goods or services to customers outside Canada, you typically donโ€™t need to charge GST/HST at all. But if your buyers are in Canada? Tax applies.

Should You Register for GST/HST Voluntarily?

Illustration of a woman working on a laptop with dollar signs and coin stacks surrounding her, representing financial and tax planning
Voluntarily registering for GST/HST before hitting $30,000 in revenue can allow you to claim input tax credits and appear more established to clients

Hereโ€™s a cool trick: even if youโ€™re under $30K, you can choose to register voluntarily. Why would anyone do that?

Because once youโ€™re 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.

Itโ€™s 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 isnโ€™t out to crush your dream, but they do expect you to play by the rules once money is involved.