Side hustle taxes in Canada (2026): what to report, CPP, GST/HST and when to pay
Reselling, tutoring, delivery, freelance design, a weekend booth: the CRA treats most of it as business income. The tax itself is rarely the shock. The shock is a bill in April that nobody withheld for. Here is what to report, what CPP and GST/HST mean for a small side business, and a calculator that tells you how much to set aside each month.
On this page
Side hustle set-aside calculator
How much should you set aside from your side income?
For residents outside Quebec (Quebec uses the QPP). CPP uses 2026 figures: 11.9% between $3,500 and $74,600, and 8% between $74,600 and $85,000, after counting your employment earnings first. Income tax is estimated as profit times the marginal rate you enter; your real rate depends on your province and total income. Ignores the deduction for part of your CPP and any credits. Estimates, not tax advice.
What you have to report
The CRA says that if you earn money through online platforms or gig work, the income is taxable and you need to report it, whether or not you receive a slip. For most side businesses run as a sole proprietor, you report revenue and expenses on Form T2125, Statement of Business or Professional Activities, which goes with your personal return. Only the profit is added to your income.
- Revenue: everything customers paid you, including tips and cash.
- Expenses you can claim: costs you paid to earn the income, such as supplies, platform fees, a share of phone and internet, advertising, and the business part of vehicle costs. Keep receipts.
- Records: the CRA asks gig workers to keep a list of all earnings with details of when, how and where the work was done, plus receipts for business expenses.
Not sure whether an activity is a business or a hobby? The CRA looks at whether there is a reasonable expectation of profit; its sole proprietorship pages and a tax professional can help you decide.
CPP on self-employment
At a job, you and your employer each pay half of CPP. When you are self-employed, you pay both halves. ESDC says self-employed people pay the full 11.9% on net business income between the $3,500 minimum and the 2026 ceiling of $74,600, up to a maximum of $8,460.90. On earnings between $74,600 and $85,000, the second additional contribution is 8%, up to $832.
If you also have a job, CPP looks at your combined earnings. Your employment earnings fill the brackets first, so:
| Situation (2026) | CPP on $12,000 of side profit |
|---|---|
| Job earning $55,000 | $12,000 × 11.9% = $1,428 |
| Job earning $70,000 | $4,600 × 11.9% + $7,400 × 8% = $547.40 + $592 = $1,139.40 |
| No job, side hustle only | ($12,000 − $3,500) × 11.9% = $1,011.50 |
You calculate it on Schedule 8 with your return. CPP stops at age 70. In Quebec the QPP applies instead. Net self-employment income also counts toward RRSP room; see what counts as earned income for an RRSP.
GST/HST and the $30,000 rule
You are a small supplier, and do not have to register for GST/HST, as long as your total taxable sales do not exceed $30,000 over four consecutive calendar quarters. For a sole proprietor, the CRA counts worldwide taxable sales from all your businesses before expenses, not just one side hustle.
| Situation | What the CRA says |
|---|---|
| Under $30,000 over four quarters | Small supplier; registration optional (you may register voluntarily) |
| Over $30,000 across four quarters, not in one quarter | You stop being a small supplier at the end of the month after the quarter you went over, and must register |
| Over $30,000 in a single quarter | You stop being a small supplier with the sale that pushed you over and must charge GST/HST on that sale |
| Rideshare or taxi driver | Must register for GST/HST from the start, even as a small supplier |
Once registered, you charge GST/HST on taxable sales, can claim input tax credits on business purchases, and file returns. Registering voluntarily below the threshold is an option some people compare, because of those credits; it also adds filing work.
Platforms now report to the CRA
Under the Reporting Rules for Digital Platform Operators in Part XX of the Income Tax Act, platforms that facilitate things like rentals, personal services and sales of goods must report seller information to the CRA. The first returns were due January 31, 2025 for the 2024 calendar year, with the same January 31 deadline every year after. The platform must also give you a copy of what it reports.
In practice: the CRA can match what a platform reports against your return. The amount on a platform statement is usually revenue, not profit, so your own expense records still matter.
Worked example
Jordan has a $55,000 job and a weekend design business that brought in $15,000 in 2026, with $3,000 of expenses (software, a share of internet, a new tablet stylus). Suppose Jordan's marginal tax rate is 30%; yours depends on your province and income.
| Step | Arithmetic | Amount |
|---|---|---|
| Profit | $15,000 − $3,000 | $12,000 |
| CPP on side profit | $12,000 × 11.9% | $1,428 |
| Income tax on profit | $12,000 × 30% | $3,600 |
| Total to set aside | $1,428 + $3,600 | $5,028, about $419 a month |
| GST/HST | $15,000 < $30,000 | Small supplier, not required to register |
Jordan's employer withholds tax only on the job. Without a set-aside, the full $5,028 shows up as a balance owing in spring. Because the bill is over $3,000, Jordan could also get instalment reminders if it happens again next year (see below).
Deadlines and instalments
- Filing: if you or your spouse or common-law partner carried on a business, the CRA's 2027 deadlines page lists June 15, 2027 for 2026 returns.
- Paying: any balance owing is still due April 30, 2027. The later filing date does not move the payment date.
- Instalments: you must pay quarterly instalments for 2026 if your net tax owing is more than $3,000 ($1,800 in Quebec) in 2026 and also in either 2025 or 2024. Instalment dates are March 15, June 15, September 15 and December 15. The CRA mails reminders in February and August to people who likely need to pay.
If a due date lands on a weekend or CRA-recognized holiday, it moves to the next business day.
Options for setting money aside
| Option | How it works | Watch for |
|---|---|---|
| Separate savings account | Move a set percentage of every payment into it the day it lands | Interest earned there is taxable too |
| Pay instalments early | Send money to the CRA during the year so there is no spring bill | Required once you meet the $3,000 test two years running |
| Change your job's withholding | Ask your employer to withhold extra tax from each paycheque | Uses Form TD1; covers income tax but think about CPP too |
| Track expenses monthly | Lowers profit, and so both tax and CPP | Only costs to earn the income count |
A dedicated account makes the set-aside automatic; our guide to whether HISA interest is taxable covers what happens to the interest it earns. If side income is your only income and it is small, see do I need to file taxes on a low income, and for what comes off a regular paycheque, see first paycheque deductions. More calculators are on the tools page.
How to handle taxes on side hustle income
- Keep a running list of every payment you receive and every business expense, with receipts.
- Each month, move a set share of side income into a separate account for tax and CPP; the calculator suggests an amount.
- Watch your taxable sales over the last four calendar quarters and register for GST/HST before you pass $30,000 (rideshare drivers register from the start).
- At tax time, report revenue and expenses on Form T2125 and calculate CPP on Schedule 8.
- Pay any balance by April 30 even though you can file until June 15.
- If your net tax owing is over $3,000 two years running, pay instalments on March 15, June 15, September 15 and December 15.
Questions people ask
Do I have to report side hustle income in Canada?
Yes. The CRA says income from gig work and online platforms is taxable and must be reported whether or not you receive a slip. You report revenue and expenses, usually on Form T2125, and pay tax on the profit.
Is there a tax-free amount for side income?
There is no separate tax-free amount for side income; it is added to your other income. The basic personal amount applies to your total income, and CPP only starts on self-employment earnings above $3,500 if you have no other pensionable earnings.
How much CPP do I pay on self-employment income in 2026?
11.9% of net self-employment earnings between $3,500 and $74,600, up to $8,460.90, plus 8% on earnings between $74,600 and $85,000, up to $832. Employment earnings count first if you also have a job.
When do I need to register for GST/HST?
When your taxable sales from all your businesses exceed $30,000 over four consecutive calendar quarters, or in a single quarter. Taxi and commercial rideshare drivers must register from the start.
When are side hustle taxes due?
For the 2026 tax year, self-employed people can file until June 15, 2027, but any balance owing is due April 30, 2027.
Do I have to pay tax instalments on side income?
Only if your net tax owing is more than $3,000 ($1,800 in Quebec) in the current year and in either of the two previous years. The CRA sends reminders in February and August.
Does the CRA know about my Etsy, Airbnb or Uber income?
Digital platforms that fall under Canada's platform reporting rules must report seller information to the CRA each year by January 31, starting with the 2024 calendar year, and give sellers a copy.
Looni reads your statements and flags bank fees, forgotten subscriptions and interest you might be paying without noticing, so more of your side income stays yours. Read-only, no advice.
Sources
Canada Revenue Agency, Do you work in the gig economy? (reporting, records, GST/HST), When to register for and start charging the GST/HST (small supplier, single-quarter rule, rideshare), Reporting Rules for Digital Platform Operators, Required tax instalments: who has to pay, 2027 tax deadlines for businesses and self-employed individuals; Employment and Social Development Canada, Contributions to the Canada Pension Plan (2026 rates and maximums). The examples are illustrative and the 30% rate is an assumption; the arithmetic is ours.