Uber and Lyft Driver Taxes in Canada: Ride-Sharing Tax Guide

Driving passengers through Uber or Lyft is commercial ride-sharing, and the CRA taxes it differently from other gig work in one important way: the GST/HST applies from your first fare. This guide covers the ride-sharing rules: GST/HST, income tax on Form T2125, vehicle costs and CPP. It is part of the self-employed taxes hub. Food delivery (Uber Eats, DoorDash) follows the general small-supplier rule instead; see the DoorDash tax guide and gig worker taxes. For getting started as a driver, see how to make money driving for Uber.

GST/HST: registered from the first fare

The CRA’s sharing-economy guidance names Lyft and Uber as common ride-sharing apps. The rule for their drivers:

The tax is inside the fare. The CRA’s page for taxi and ride-sharing drivers says the GST/HST is usually already included in ride-sharing fares, so you work out the tax included in each fare: fare × rate ÷ (100 + rate). The rate is set by where the trip begins: HST if it begins in an HST province, GST if it begins elsewhere in Canada or ends outside Canada. Even when the platform collects the fares, the CRA’s ride-sharing compliance page says making sure the GST/HST is collected and remitted is your responsibility.

Input tax credits. As a registrant you can generally recover the GST/HST you pay on business purchases such as gas, car repairs, and car washes. The CRA notes you can’t claim them for insurance costs or interest, because those aren’t subject to the GST/HST. You can calculate your net tax with the regular method or the quick method; the GST/HST guide for the self-employed explains both.

Other self-employment income. The CRA says that when your combined taxable sales from ride-sharing and other work total less than $30,000, your mandatory registration generally covers only the ride-sharing fares unless you ask otherwise, which means you don’t charge GST/HST on the other sales and can’t claim input tax credits for them; above that, you charge GST/HST on all of them.

Quebec. Revenu Québec administers the GST and the Quebec sales tax (QST) in Quebec, so Quebec drivers register and file with it rather than the CRA.

Income tax: Form T2125

The CRA says ride-sharing drivers must:

• report all income from driving, including tips, on their return, and may claim expenses for any charges the platform keeps;
• fill in Form T2125 and file it with the return, using industry code 485310 (“Taxi service”), or 485320 (“Limousine service”) for a limousine;
• carry the result to lines 13499 and 13500 of the return.

Under the Reporting Rules for Digital Platform Operators in Part XX of the Income Tax Act, platforms that let sellers sell goods or provide services such as rentals, rideshare and delivery report each reportable seller's identity and earnings to the CRA every year, starting with the 2024 calendar year, and give the seller a copy by January 31 of the following year. A seller with fewer than 30 sales of goods totalling $2,800 or less in the year isn't reported. Being reported, or not, doesn't change the seller's own tax obligations. Ride-sharing is among the activities the CRA lists as covered (reporting rules for digital platforms). For each reportable seller, the platform reports the total paid or credited to you and any fees, commissions or taxes the platform withheld or charged, broken down by calendar quarter. Your own records of fares, tips and fees are what you file from.

Vehicle expenses

The CRA’s rule for a vehicle used both for ride-sharing and personally:

The business share comes from a logbook of business and total kilometres; vehicle expenses for the self-employed covers what it needs to show.

Owning or leasing the car. Capital cost allowance on a car you own is claimed at the same business share. Passenger vehicles have cost ceilings: for one bought in 2026, Class 10.1 applies above $39,000 before tax, and a zero-emission passenger vehicle (Class 54) is capped at $61,000 before tax. Leasing costs are capped at $1,100 a month before tax for new leases entered into in 2026.

The per-kilometre rate isn’t a self-employed method. The per-kilometre rates the Department of Finance announces each year are limits on tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes. A self-employed driver deducts actual costs at the business share instead.

Insurance. Uber’s insurance page says your personal auto policy must be in force to drive with Uber and that telling your broker or insurer about ride-sharing is your responsibility; in Ontario, Uber’s Toronto vehicle requirements note an approved ride-sharing policy from Intact Insurance. Insurance premiums are part of the vehicle costs above.

Other costs. The business share of your phone plan and the full cost of things used only for driving passengers, such as a phone mount or water for riders, follow the same principle: reasonable costs incurred to earn the income. The self-employed deductions guide lists the T2125 expense lines.

CPP and income tax on your profit

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.

Paying and filing

Nothing is withheld for income tax or CPP when you’re self-employed, so both are paid with your return, and if you owe enough at filing time the CRA can ask for instalments the following year. First-time self-employed taxes explains the instalment threshold and dates and the self-employed filing deadline; if you pay late, the CRA charges interest at its prescribed rate.

Related guides

• Self-employed taxes hub
• GST/HST on freelance and self-employed income
• Vehicle expenses for the self-employed
• DoorDash tax guide
• Gig worker taxes in Canada
• How to make money driving for Uber in Canada