The best free bookkeeping tool for most Canadian side hustles is a well-organized spreadsheet or a free app such as Wave Starter or Zoho Books Free. The CRA requires you to keep records of all transactions to support your income and expense claims, but it says it “does not issue record books nor suggests any type of book or set of books” (CRA business records). Paid software starts to pay for itself when you send many invoices, want bank feeds, or are registered for GST/HST and need tax tracked on every sale.
This guide closes out the admin set. It works best after you have separated business and personal money, and it feeds record-keeping, expense deductions, and reporting income on T2125. If you want to offer bookkeeping to others, see freelance bookkeeping.
Is a spreadsheet enough for side hustle bookkeeping in Canada?
Yes, for many side hustles with a few transactions a week. The CRA asks for records of daily income and expenses, with income records showing the date, amount, and source, and expense receipts showing the date, the seller’s name and address, a description, and the vendor’s GST/HST number on purchases of $100 or more from a registrant (CRA). A spreadsheet can capture all of that.
A simple layout with three tabs:
Income tab: Date · Client or platform · Invoice or payout ID · Description · Amount · GST/HST collected (if registered) · Paid date
Expenses tab: Date · Vendor · Description · Category · Amount · GST/HST paid · Business % · Receipt file name
Mileage tab: Date · Destination · Purpose · Km (see tracking mileage for the CRA)
Use categories that match the expense lines on Form T2125, such as advertising, office expenses, supplies, and telephone and utilities, so the year-end totals copy straight across. A summary tab with a SUMIF per category gives your T2125 numbers in seconds.
Which free and cheap bookkeeping apps work for Canadian side hustles?
These four are widely used in Canada. Prices below were listed on each official pricing page on October 4, 2026, and introductory offers change often.
| Tool | Free option | Paid entry price (as listed) | Notes from the pricing page |
|---|---|---|---|
| Wave | Starter, $0 | Pro: US$19 or $25 CAD a month; US$190 or $250 CAD a year | Starter includes unlimited estimates, invoices, bills and bookkeeping records; card payments 2.9% + $0.60 (Amex 3.4% + $0.60). Pro adds bank transaction import and receipt capture |
| Zoho Books | Free plan while revenue stays at or under C$50K for the financial year | Standard: C$20 a month, or C$15 a month billed annually | Free plan allows up to 1,000 invoices a year and lists mileage tracking and GST/QST return support |
| FreshBooks | Free trial | Lite: regularly $26 CAD a month (promo $1 a month for the first year at time of writing) | Lite sends invoices to 5 clients, tracks expenses, and generates tax-time reports |
| QuickBooks Online | 30-day free trial | Lite: starts at $20 a month (promo price shown at time of writing) | Lite covers invoices, sales tax tracking, mileage tracking, 5 report templates, and 2 bank connections for one user |
Illustrative example
Assumed numbers, using the listed prices above. A side hustler compares a year of Wave Pro at the annual price with a year of FreshBooks Lite at the regular monthly price.
- Wave Pro: $250 CAD a year, billed annually.
- FreshBooks Lite: $26 × 12 = $312 CAD a year at the regular price (less in year one under the promotion).
- Wave Starter or Zoho Books Free: $0, which is why most small side hustles should start there.
How do you choose a bookkeeping tool for a side hustle?
Match the tool to how you get paid and whether you charge GST/HST.
Step 1: Count your transactions
Under a few dozen a month, a spreadsheet or a free plan is fine.
Step 2: Decide whether you need invoicing
If you invoice clients regularly, an app that sends invoices and records payments saves time. Wave Starter and Zoho Books Free both include invoicing.
Step 3: Check GST/HST handling
If you are registered for GST/HST, pick a tool that tracks tax collected and paid on each line. See GST/HST registration.
Step 4: Consider bank feeds
Automatic bank import is the biggest time-saver, and it is often a paid feature (for example, Wave lists it under Pro). It works best when your side hustle has its own business account.
Step 5: Try before paying
All the paid options above list a free trial or free plan. Enter one month of real transactions before deciding.
What bookkeeping mistakes do Canadian side hustlers make?
Most mistakes are about timing, not tools.
- Doing it all in April. Update weekly or monthly.
- Paying for features you don’t use. Start free and upgrade when a specific need appears.
- Not saving receipts. The app records the transaction; the receipt proves it. Keep receipts six years, per record-keeping.
- Mixed accounts. Bank feeds from a personal account pull in groceries and rent. Separate the money first.
- Missing the promo end date. Note when introductory pricing ends.
How do bookkeeping tools help with side hustle taxes in Canada?
They produce the totals you need for Form T2125 and, if registered, your GST/HST returns. A clean profit-and-loss report gives gross income and expenses by category, which you then enter in tax software such as Wealthsimple Tax TODO-AFFILIATE. If you want an app built around invoicing and expense tracking, FreshBooks TODO-AFFILIATE is one of the options compared above. Subscription fees for business software are a business expense; see side hustle expense deductions.
This is not tax, legal, or insurance advice.
Which guides sit next to bookkeeping tools for side hustles?
Record-keeping for side hustles, how to invoice clients, separating business and personal money, and tax prep before January. Platform sellers can match their records to the fee breakdowns in the Etsy review, Poshmark review, and Amazon KDP review. Bookkeepers should also read side hustles for accountants and bookkeepers.
What are the common questions?
Does the CRA require bookkeeping software?
No. The CRA says it does not issue record books or suggest any type of book or system. You must keep complete, readable records of all business transactions, generally for six years.
What is the best free bookkeeping app in Canada?
Wave Starter and Zoho Books Free are both free as of October 2026. Wave Starter includes unlimited invoices and records, and Zoho Books Free is available while revenue stays at or under C$50K for the financial year.
Can I use a spreadsheet for my side hustle taxes?
Yes. An income tab, an expense tab using T2125 categories and a mileage tab cover most side hustles. Keep the receipts that support each entry.
How much does FreshBooks cost in Canada?
FreshBooks lists its Lite plan at a regular price of $26 CAD a month, with an introductory offer at the time of writing. Check the pricing page for current offers.
Is bookkeeping software tax deductible?
Software you pay for to run your side hustle is generally a deductible business expense. Keep the subscription receipts with your records.
Which sources support this guide?
The rules, rates, and platform requirements in this guide are checked against these primary sources. Retail price ranges are labelled as ranges to verify locally, and they are not quotes.
- Business records — Canada Revenue Agency
- Wave pricing — Wave Financial
- Zoho Books pricing (Canada) — Zoho
- FreshBooks Canada pricing — FreshBooks
- QuickBooks Online Canada pricing — Intuit QuickBooks Canada
- Form T2125, Statement of Business or Professional Activities — Canada Revenue Agency