Side Hustles and Personal Taxes: What Canadians Need to Report
Side hustles can boost your income—but they also come with tax responsibilities many Canadians overlook. From reporting freelance earnings to understanding deductible expenses and GST/HST registration rules, knowing your obligations helps you avoid surprises and keep your extra income working for you.
Side hustles are increasingly common across Canada—from freelancing and online selling to ride-sharing and consulting. While extra income is welcome, tax season is where many people realize they underestimated their reporting obligations.
All income earned from side activities must be reported, even if no T4 is issued or payments are received through e-transfers or cash. In most cases, this income is reported as business or professional income using Form T2125, which the CRA explains in its guide on reporting business income and expenses.
A common point of confusion is the difference between business income and casual activity. The CRA generally looks at whether there is an intention to earn profit, regular activity, and commercial behaviour. Its overview of business income tax reporting provides clarity on how income is classified.
Side hustlers may also be eligible to deduct certain expenses, provided they are reasonable, documented, and related to earning income. These may include supplies, software subscriptions, a portion of vehicle costs, and eligible home office expenses. The CRA’s overview of business or professional income outlines common deductible categories.
Another major issue arises when income grows. Once gross revenue exceeds $30,000 over a 12-month period, GST/HST registration may be required, and Quebec residents may also need to register for QST. The CRA explains when to register and charge tax under its guidance on GST/HST registration, while Revenu Québec outlines its process for registering for the GST and QST.
How A&S Financials Helps
A&S Financials assists individuals with side income reporting, deductible expense reviews, GST/QST registration, and audit-ready record-keeping.
Final Thought
Side income creates opportunity—but only when it’s reported correctly. Clear records and proper guidance keep your extra earnings working in your favour.