Question 1

How is side hustle income taxed in Canada?

Accepted Answer

Side hustle income is added on top of your employment income and taxed at your marginal rate. You also owe self-employed CPP contributions (11.9% on net self-employment income between $3,500 and $71,300, because you pay both the employee and employer portions). If your side hustle revenue exceeds $30,000 in any four consecutive calendar quarters, you must register for and charge GST/HST.

Question 2

Do I have to pay CPP on side hustle income?

Accepted Answer

Yes. Self-employed individuals pay both the employee and employer portions of CPP — a combined rate of 11.9% in 2026 on net self-employment earnings between $3,500 and $71,300. If you already max out CPP through employment, your self-employment CPP may be reduced. CPP2 also applies at 8% on earnings between $71,300 and $81,200.

Question 3

What expenses can I deduct from side hustle income?

Accepted Answer

You can deduct reasonable business expenses: home office costs (proportional to space used), internet and phone (business portion), software and subscriptions, equipment and supplies, vehicle expenses (business use %), advertising and marketing, professional development, bank fees, and professional services (accounting, legal). Keep all receipts and records.

Question 4

When do I need to register for GST/HST?

Accepted Answer

You must register for GST/HST when your taxable revenue exceeds $30,000 in any single calendar quarter or over four consecutive calendar quarters. This is the "small supplier" threshold. Once registered, you charge GST/HST to clients and remit it to the CRA, minus any Input Tax Credits (ITCs) for business expenses.

Question 5

How do I report side hustle income on my tax return?

Accepted Answer

Report self-employment income on Form T2125 (Statement of Business or Professional Activities), which is part of your T1 personal tax return. Report gross revenue, deduct eligible expenses, and the net income is added to your other income. You must also complete Schedule 8 for CPP contributions on self-employment.

Question 6

Do I need to make quarterly tax instalments?

Accepted Answer

If your net tax owing exceeds $3,000 in the current year and in either of the two prior years, the CRA requires quarterly instalment payments (due March 15, June 15, September 15, December 15). Failing to pay instalments on time results in instalment interest charges.

Question 7

What is the tax deadline for self-employed Canadians?

Accepted Answer

Self-employed individuals (and their spouses) have until June 15 to file their tax returns. However, any tax owing is still due by April 30. So while you get extra time to file, you do not get extra time to pay — interest accrues on unpaid amounts after April 30.

Question 8

Should I incorporate my side hustle?

Accepted Answer

Incorporation makes sense when your side hustle net income consistently exceeds roughly $80,000-100,000 per year and you do not need all the income personally. The small business tax rate (9% federal + provincial) is much lower than personal rates, allowing you to defer tax by keeping money in the corporation. Below $50,000-80,000/year, the cost of maintaining a corporation (accounting, legal, annual filings) usually outweighs the benefits.

Employment Income	Combined Marginal Rate (ON)	Effective Rate on Side Income
$50,000	29.65% + 11.9% CPP	~41.5%
$75,000	31.48% + 11.9% CPP	~43.4%
$100,000	33.89% + 4% CPP2	~37.9%
$130,000	43.41% + 0% CPP	~43.4%
$170,000	46.41% + 0% CPP	~46.4%

Annual Revenue	GST/HST Obligation
Under $30,000	Optional (small supplier exemption)
Over $30,000	Must register and charge GST/HST

Side Hustle Tax Calculator

How this calculator works

Understanding self-employment taxes in Canada

Tax rates on side hustle income by province (2026)

Common deductible expenses

Home office

Vehicle

Other common deductions

GST/HST obligations

Tax-saving strategies for side hustles