Frequently Asked Questions

Do I have to report self-employment income if I earn under $30,000?

Yes. All self-employment income must be reported on Form T2125, even if it’s part-time and under $30,000.

Can I voluntarily register for GST/HST before $30,000?

Yes. Some do this to claim input tax credits on expenses. It’s helpful if you have high business costs (e.g., vehicle, equipment).

What’s the difference between under $30,000 and over $30,000 for self-employed income?

Under $30,000 – you are a small supplier and don’t have to register for GST/HST (unless you choose to).

Over $30,000 – you must register for, collect, and remit GST/HST.

What income goes on T2125?

Gross self-employment income (Uber/DoorDash payouts, beauty service revenue, etc.) before deducting any expenses.

Do Uber and DoorDash drivers need to register for GST/HST?

Yes. Rideshare drivers (Uber, Lyft, etc.) must register for GST/HST from the first dollar earned. Food delivery drivers (DoorDash, SkipTheDishes, Uber Eats) must register only once total income from all taxable supplies exceeds $30,000.

What expenses can I claim for Uber/DoorDash?

Common: gas, vehicle insurance (business portion), maintenance, car washes, parking, tolls, CCA (vehicle depreciation), cell phone, delivery bags, cleaning supplies, accounting fees

How do I claim home office expenses?

If it’s your main place of business or regularly used to meet clients, you can deduct a portion of utilities, mortgage interest/rent, insurance, and property tax based on business-use percentage

What is CCA and how does it work?

Capital Cost Allowance lets you deduct the cost of long-term assets (car, salon chair, computer) over time instead of all at once

What expenses can I claim for beauty services?

Products used on clients, salon rent or home office expenses, equipment (chairs, tools), advertising, insurance, education, travel to clients

Can I contribute to RRSP to reduce self-employment taxes?
Yes. RRSP contributions reduce taxable income and can lower your tax bracket. The deduction limit is based on 18% of your previous year’s earned income, up to the annual maximum.

How else can I reduce taxable income?

Maximize deductible business expenses, contribute to RRSP, deduct CCA, and claim all eligible credits (medical, moving, etc.).

Can I contribute to RRSP to reduce self-employment taxes?

Yes. RRSP contributions reduce taxable income and can lower your tax bracket. The deduction limit is based on 18% of your previous year’s earned income, up to the annual maximum.

What about TFSA?

A TFSA does not reduce taxable income, but investment growth and withdrawals are tax-free.

Do I need to keep receipts?

Yes. Keep receipts, mileage logs, bank statements, and invoices for 6 years in case CRA requests proof

What about FHSA?

The First Home Savings Account lets you deduct contributions (like RRSP) and withdraw tax-free for a first home.

What happens if I don’t file T2125 for side income?

You may face penalties, interest, and reassessment. CRA can access platform records (Uber, DoorDash) and match them to your tax return.