Canadian side hustle tax checklist

1. Record keeping

• Record every payment you receive with its date, amount, and source, whether it came by cash, e-transfer, or an app. [1]
• Keep the original documents: sales invoices, receipts, bank deposit slips, fee statements, and contracts. [1]
• Keep separate records for each business you run. [1]
• Keep records and supporting documents for at least six years from the end of the last tax year they relate to. [2]
• If you drive for the business, keep a logbook of each business trip (date, destination, purpose, kilometres) and record the odometer at the start and end of the year. [3]
• Know that certain selling, rental, and gig platforms must collect information on certain sellers and report it to the CRA every year. Keep your own records anyway. [4]

Go deeper: Record keeping for side hustles

2. Report the income on Form T2125

• Report self-employment (business or professional) income and expenses on Form T2125 with your income tax return. [5]
• Enter only the business part of any expense that is partly personal; personal expenses are not deductible. [6]

Go deeper: How to report side hustle income to the CRA

3. Deduction categories to track

• Claim reasonable current expenses you incur to earn the income. Capital purchases (equipment, a vehicle) are claimed over time as capital cost allowance (CCA), not all at once. [6]
• Sort receipts into the T2125 expense lines, for example: advertising; meals and entertainment (allowable part only); insurance; interest and bank charges; business taxes, licences, and memberships; office expenses; office stationery and supplies; professional fees; rent; repairs and maintenance; travel; utilities; fuel (not motor vehicles); delivery, freight, and express; motor vehicle expenses; CCA; and other expenses. [7]
• Business-use-of-home: deductible only if the space is your principal place of business, or used only for the business and regularly to meet clients. Claim a reasonable share, such as workspace area divided by total home area. [8]

Go deeper: What side hustle expenses can you deduct?

4. GST/HST and the $30,000 small supplier threshold

• Add up your worldwide taxable supplies (revenue before expenses, from all your businesses and your associates) each calendar quarter. [9]
• If you do not exceed $30,000 over four consecutive calendar quarters, you are a small supplier and do not have to register (you may register voluntarily). [9]
• If you exceed $30,000 in a single calendar quarter, register and start charging GST/HST on the supply that made you exceed it. [9]
• If you exceed $30,000 over four consecutive quarters (but not in one quarter), you stop being a small supplier at the end of the month after that quarter and must register. [9]
• Self-employed taxi and commercial ride-sharing drivers must register for GST/HST even if they are small suppliers. [10]
• Annual GST/HST filers who are self-employed with a December 31 year-end: for 2025, payment was due April 30, 2026 and the return by June 15, 2026. [11]

Go deeper: GST/HST registration for side hustles

5. Set money aside for tax

• Expect no tax withheld from self-employment income. The CRA notes the self-employed may have to pay tax by instalments. [12]
• Set aside for federal plus provincial or territorial income tax at your bracket. Federal rates for 2026 start at 14% on the first $58,523 of taxable income; your province applies its own rates on top. [13]
• Set aside for CPP on your net self-employment income as well (section 6), and, if you are registered, the GST/HST you collect, which is not your income. [14][9]

Go deeper: How much tax to set aside from a side hustle

6. CPP on self-employment income

• Outside Quebec, self-employed people pay the full CPP contribution (both the employee and employer share): 11.9% of net business income above the $3,500 basic exemption. [14]
• 2026 maximum base contribution for the self-employed: $8,460.90. Earnings between $74,600 and $85,000 also attract the second additional contribution at 8% (maximum $832). [14]
• Calculate the amount on Schedule 8 (or Form RC381) for line 42100. Quebec residents pay QPP through their Revenu Québec return instead. [15]

7. Tax instalments

• You must pay 2026 instalments if your net tax owing is more than $3,000 ($1,800 in Quebec) in 2026 and was also more than that in either 2025 or 2024. [12]
• Instalments are due March 15, June 15, September 15, and December 15. [16]
• Watch for CRA instalment reminders: a February reminder covers March and June, and an August reminder covers September and December. [12]

8. Key dates

• December 15, 2026: last 2026 instalment, if you pay instalments. [16]
• December 31: your province or territory of residence on this date sets your provincial tax rates and instalment threshold. [13][12]
• April 30: pay any balance owing. For the 2025 return this was April 30, 2026; check the CRA page for the 2026 return dates. [17]
• June 15: filing deadline when you or your spouse or common-law partner carried on a business (other than mainly tax-shelter investments). For the 2025 return this was June 15, 2026. Any balance owing is still due April 30. [17]
• If a due date falls on a weekend or a CRA-recognized public holiday, it moves to the next business day. [17]

Go deeper: Side hustle tax prep before January