Understanding New CRA Rules for Gig Workers in Canada
Canada Revenue Agency (CRA) has introduced new rules requiring digital platforms like Uber, DoorDash, Fiverr, Rover and other gig economy operators to report their workers’ income. These changes are in effect for the 2024 tax year.
Key CRA Changes Impacting Canadian Gig Workers
Under the new federal legislation, digital platforms must collect and report workers’ income, including personal details and earnings, to the CRA annually by January 31 of each year, beginning January 31, 2025 and taking effect for income generated in 2024. This ensures that income from gig work is accurately reflected for tax purposes.
These new reporting rules apply to individuals who have conducted over 30 transactions or earned more than $2800 in a calendar year through platforms like DoorDash, Rover, and others. Discrepancies between personal filings and platform-reported figures could lead to penalties.
Additionally, reporting this income allows gig workers to accrue Registered Retirement Savings Plan (RRSP) contribution room, and offers the option to contribute to the Canada Pension Plan (CPP) and Employment Insurance (EI), aiding in future financial planning.
How Canada Revenue Agency Changes Affect Gig Workers
- Income Reporting
- Gig workers must report all earnings, including income from outside Canada, on Line 26000 of their tax return.
- Gig workers can use Form T2125, Statement of Business or Professional Activities, to report business income and claim eligible deductions.
- Claiming Expenses
- Workers can deduct business expenses directly related to their income, such as:
- Platform fees
- Marketing costs to boost profiles or websites
- Supplies or materials like software, tools, or raw products
- Workers can deduct business expenses directly related to their income, such as:
Proper record-keeping is essential to support these claims.
Learn more about what counts as an eligible business expense on your income tax return here.
- GST/HST Registration
- Gig workers earning more than $30,000 in taxable income over four consecutive calendar quarters must register for and remit GST/HST.
- Voluntary registration is also an option for those earning less, allowing them to claim Input Tax Credits (ITCs) on business-related purchases.
- We recommend analyzing the benefits of choosing the quick method of reporting your GST when registering.
- Tax Credit Opportunities
- For those earning income outside Canada, taxes paid to foreign countries may qualify for a Federal Foreign Tax Credit (Form T2209).
For more details on tax obligations and rules for gig workers, visit the CRA’s official page, Gig Economy – Canada.ca.
How CRA Tax Changes Affect Your Gig Work Income
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