Tax Tips for the Gig Economy – A Complete Guide by a Montreal CPA Firm Near You

Introduction

The gig economy has exploded in Canada, with millions earning income from rideshare

driving, food delivery apps, online freelancing platforms, tutoring, content creation,

short-term rentals, and other part-time or flexible work. While gig work offers freedom, it

also comes with complex tax obligations. Many gig workers mistakenly believe they

don’t need to report small income, or that cash payments don’t count. Others under-

claim expenses or fail to register for GST/HST when required. CRA treats gig economy

income the same as any business income—it must be reported, documented, and

supported with proper bookkeeping. This guide provides essential tax tips for gig

economy workers in Canada, ensuring you stay compliant, avoid penalties, and

maximize your deductions.

Legal and Regulatory Framework

Gig workers are considered self-employed under the Income Tax Act. This means:

• All income—cash, e-transfer, online platform payouts—must be reported on Form

T2125.

• Workers must track income from platforms like Uber, Lyft, SkipTheDishes, DoorDash,

Fiverr, Upwork, Etsy, Amazon, Airbnb, and others.

• Expenses must be incurred to earn income (per section 18(1)(a)) and be reasonable

(section 67).

• Business records must be kept for six years, including receipts, invoices, mileage

logs, and payout reports.

• Gig workers earning over $30,000 in a 12-month period must register for GST/HST

under the Excise Tax Act.

• Rideshare drivers must register for GST/HST immediately, regardless of income, due

to special CRA rules.

• CPP applies to net business income for self-employed individuals.

These rules form the legal foundation of tax compliance for gig workers in Canada.

Key Court Decisions

Several court cases underline the need for gig workers to report income accurately.

In Zsoldos v. Canada, CRA used bank deposits and platform records to establish

unreported self-employment income; the court upheld CRA’s assessment.

In McKeown v. The Queen, vehicle expenses were denied for lack of mileage logs,

signaling the importance of documentation.

In Sowrey v. Canada, the court confirmed that estimates without receipts cannot support

business expenses.

In Posluszny v. Canada, CRA successfully reclassified income streams as business

income, emphasizing full reporting obligations.

These rulings highlight that CRA and the courts enforce strict standards for gig workers.

Why CRA Targets This Issue

Gig workers are heavily targeted by CRA because:

• income is often underreported

• many payments are made via e-transfer or cash

• platforms issue T4A slips, which CRA uses to cross-check filings

• vehicle, cellphone, and home-based expenses are overclaimed

• GST/HST registration is often ignored

• mileage logs are rarely maintained

• platform payouts don’t always align with reported income

• rapid growth of the gig economy presents significant tax compliance gaps

CRA also obtains data directly from platforms (e.g., Uber), allowing it to audit gig

income with precision.

Mackisen Strategy

At Mackisen CPA Montreal, we help gig workers maximize deductions while remaining

fully compliant. Our structured system includes:

• calculating net gig income and completing Form T2125

• identifying deductible expenses: vehicle costs, cellphone, supplies, commission fees,

platform fees, parking, meals (when business-related), and equipment

• setting up a mileage log for rideshare and delivery workers

• managing GST/HST registration and ITC claims

• determining whether quarterly instalments are required

• organizing receipts and payout statements

• reviewing deductions annually to prevent CRA reassessment

• helping gig workers integrate taxes into their budgeting

With our guidance, gig economy clients reduce tax bills and avoid audit-triggering

mistakes.

Real Client Experience

A rideshare driver had no mileage log and overclaimed fuel and repairs. CRA denied

most expenses. We recreated his logs using trip data and reinstated much of the

deduction.

Another client earning from Fiverr, Etsy, and DoorDash underreported income due to

multiple platforms. CRA issued a review letter. We consolidated all payout histories and

corrected the return, avoiding penalties.

A third client renting through Airbnb failed to collect GST/QST as required in Québec.

We registered them properly, corrected filings, and avoided future non-compliance

issues.

Common Questions

Gig workers often ask whether cash income must be reported. Yes—100% must be

declared.

Others ask whether vehicle repairs, tires, or car washes are deductible. Yes—based on

business-use percentage.

Some ask whether GST/HST applies to gig services. Yes—once income exceeds

$30,000, except rideshare drivers who are required to register immediately.

Another question: Can gig income be considered a hobby? No—paid work is taxable

business income.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps

gig workers stay compliant while maximizing all legitimate deductions. Whether you

drive, deliver, create, teach, or freelance online, our expert team ensures precision,

clarity, and full CRA protection.