Freelancing full-time or picking up side gigs? The tax man still wants his share—but you can make smart moves to keep more of your money.
Freelance Freedom Comes with Tax Responsibility
In Canada, if you earn income from freelance work, short-term gigs, or contracts through platforms like Fiverr, Uber Eats, or SkipTheDishes, you’re part of the gig economy. You’re your own boss—and that means you’re also in charge of your taxes.
Whether you’re building websites, consulting businesses, designing logos, or offering delivery services, you’re considered self-employed. That changes how you report income, pay taxes, and claim deductions.
Yes, You Must Report All Your Income
The Canada Revenue Agency (CRA) expects gig workers and freelancers to report all business income, including cash payments and online transactions. This goes on line 26000 of your income tax return, and you’ll need to complete Form T2125 to outline your business activities, income, and expenses.
Even if you earn money from clients overseas, it still counts. All income—Canadian or foreign—needs to be reported.
Claim Those Business Expenses – They Add Up!
Good news: your business-related expenses can help lower your tax bill. If the money you spend helps you earn income, chances are, it’s deductible. Some common deductions include:
- Home office expenses (rent, utilities, internet)
- Vehicle and gas costs (if used for work)
- Marketing expenses (ads, website fees)
- Subscriptions or platform fees (like those on Fiverr)
- Software licenses and work-related tools
- Professional services (like hiring an editor or translator)
Just remember to keep all your receipts and track them properly. The CRA expects proof if they ever ask.
GST/HST: What to Know and When to Register
If your total revenue from gigs or freelance work hits $30,000 over four consecutive calendar quarters, you must register for a GST/HST account. Once registered, you’ll need to:
- Charge GST/HST on your services
- File returns regularly
- Remit the taxes you collect to the CRA
Even if you earn under $30,000, you can still choose to register voluntarily. This lets you claim Input Tax Credits (ITCs)—refunds on GST/HST paid on business expenses. It’s often worth it if your business has high startup costs.
CPP Contributions: Double the Cost, Double the Benefit
As a freelancer, you don’t have an employer sharing the load. You’re responsible for both the employee and employer parts of your Canada Pension Plan (CPP) contributions. While this means paying more now, it also means higher CPP benefits in retirement.
Keep in mind that your CPP contributions are based on your net self-employment income—so tracking those deductions really does pay off.
Don’t Wait for April: Pay in Installments
Most freelancers don’t have taxes deducted automatically. If you owe more than $3,000 in tax, CRA may ask you to pay in quarterly instalments—typically in March, June, September, and December.
Making instalments on time prevents interest charges and helps you avoid a painful tax bill in April.
Stay Organized All Year Round
Freelancers who thrive financially don’t scramble at tax time—they plan ahead. Here’s how:
- Track your income from each client or platform
- Use tools or software to log expenses as they happen
- Keep digital and paper copies of invoices, receipts, and statements
- Stay on top of due dates for returns, instalments, and remittances
A little weekly bookkeeping saves hours (and stress) later.
Final Thoughts: Your Tax Game, Your Terms
Freelancing in Canada gives you freedom. But that freedom comes with responsibility—especially at tax time. The more organized and informed you are, the more confident and in control you’ll feel.
So, get ahead of deadlines. Know your numbers. Claim what you’re owed. And when in doubt, ask a tax pro to help you stay on the right track.
