Side Hustles in Canada: Gig Apps, Freelancing, Passive Income and Taxes

A side hustle is any way of earning beside your main income: driving or delivering through an app, freelancing, selling online, renting out a room or property, or investing for income. This hub compares the main options and explains how side income is taxed. It is part of the income section.

Gig apps: driving and delivery

• Gig economy apps: rideshare, delivery and task apps compared, with their requirements.
• Food delivery apps: Uber Eats and DoorDash side by side.
• Driving for Uber, DoorDash and Instacart: how each works, what it requires, and the taxes.

Ride-sharing and delivery are treated differently for the GST/HST: A self-employed driver who provides commercial ride-sharing is treated as a taxi business for GST/HST: they must register and charge GST/HST on fares from their first ride, even below the $30,000 small-supplier threshold. Delivering food or groceries is not ride-sharing, so the usual small-supplier rule applies to it.

Freelancing and online work

• Freelancing guide: setting up, invoicing, getting paid and the taxes.
• Freelance platforms: what each charges and how it works.
• Making money online: selling, content and services, with their costs.
• Online jobs for teens and paid survey sites: age rules and how they pay.

Passive income and rentals

• Passive income ideas: savings, GICs, dividend funds and rentals, and how each is taxed.
• Hosting on Airbnb: platform fees, short-term rental rules and taxes.
• Side hustles compared: options by startup cost, skills and control over your hours.

How side income is taxed

• Income tax: self-employment income is reported on Form T2125 and taxed with the rest of your income. Records have to be kept, and business expenses can be deducted.
• CPP: You contribute to the CPP if you are over 18, work in Canada outside Quebec and earn more than $3,500 a year; contributions stop when you turn 70, and from 65 someone already receiving a CPP or QPP retirement pension can choose to stop. Self-employed people pay both the employee and the employer share of CPP contributions on their net business income (11.90% above the basic exemption up to the first earnings ceiling, plus 8% CPP2 between the first and second ceilings), worked out on Schedule 8 and paid with the income tax return. A non-refundable tax credit is claimed on half of the base contributions, and the other half, the first additional contributions and all CPP2 contributions are deducted from income.
• GST/HST: You have to register for the GST/HST once you make taxable sales in Canada and are no longer a small supplier: that happens when your taxable sales go over $30,000 in a single calendar quarter (register from that sale) or over the last 4 consecutive calendar quarters (by the end of the month after that quarter); below that you can register voluntarily.
• Instalments: if tax isn’t withheld from your side income, you may have to pay tax during the year. You have to pay income tax by instalments for a year if your net tax owing is more than $3,000 ($1,800 if you live in Quebec on December 31) for that year and was also more than that in either of the two previous years. Instalments are due March 15, June 15, September 15 and December 15; if your main source of income is self-employment income from farming or fishing, there is one instalment due date, December 31.

The self-employed tax hub covers the forms and deductions in detail.

Related guides

• Side hustle taxes and a checklist before you start
• Small business finance
• Side hustle tax calculator