CRA targets gig workers

Most gig workers unaware of new rules

Nearly 1 in 4 Canadians (23 per cent) have been part of the gig economy; gig-related income represents a quarter of total income (24 per cent among current gig workers. H&R Block Canada highlights tax considerations for gig workers.

• 66 per cent of gig workers were not aware of new rules requiring platforms to report users’ income to the CRA.
• 45 per cent of gig workers took on gig work or a side hustle due to the increased costs of living.
• 36 per cent of gig workers said despite learning gig platforms must report users’ income to the CRA, they’re still not inclined to report all gig income.
• Gig income represents an average of 24 per cent of total income for Canadian gig workers.
• 37 per cent of gig workers are unclear on tax implications for gig income.
• Among gig workers with a primary employer, 40 per cent said their primary employer isn’t aware of their side hustle.

A whopping 7.4 million adult Canadians are part of the gig economy, of which 90 per cent report it being a side hustle generating extra income versus 10 per cent whose income is solely generated through gig work, reveals a new survey commissioned by H&R Block Canada. Whether it’s freelance or contract work, delivery or rideshare services, dog walking, homestay rentals, tutoring, or selling products on marketplace platforms, nearly 1 in 4 Canadians (23 per cent) report taking on a gig or side hustle to boost their income. This represents an approximate 85 per cent increase in the number of Canadian gig workers from just three years ago, based on a similar H&R Block study in 2022. A further 3 million Canadians (10 per cent) said they are thinking about taken a side hustle on in the future. 

“In light of the new federal legislation, the Canada Revenue Agency (CRA) is able to compare what gig workers report their income to be from digital platforms against what the digital platform reports on their behalf,” said Yannick Lemay, Tax Expert, H&R Block Canada. “Despite this, many Canadians still appear tempted not to declare all their gig-related income, which carries significant risks and is breaking the law. The good news is that there are a multitude of tax benefits and credits that gig workers can claim to put money back in their pockets.”

Key Study Findings.  

Increased cost-of-living fuels gig economy: According to the study, 64 per cent of Canadians worry that 2025 is going to be a tough financial year for them, and 51 per cent say that despite making a good salary they struggle to make ends meet for everyday expenses. Almost half (45 per cent) of gig workers said they took on a side hustle to generate more income due to higher cost-of-living pressures.

A third of gig workers didn’t declare all income last year; a significant portion didn’t plan to report all income this tax season. When it comes to declaring gig-related income, the study reveals that a significant portion of gig workers are willing to take risks when filing their taxes. More than a quarter (28 per cent) said they didn’t declare all gig income when they filed their taxes last year (for income generated in 2023). Now that tax filing season is in full swing (for income earned in 2024), 30 per cent said they weren’t planning to declare all-gig related income. Among gig workers, more than a third (36 per cent) said they were willing to risk not declaring ‘any’ gig work related income.  That is, until they learned of the new rules that require gig platforms to report users’ information and income to the CRA.

Gig workers had a change-of-heart about declaring income upon learning about new rules requiring platforms to declare users’ income to the CRA: Under new federal legislation, digital gig platform operators such as Uber, DoorDash, Airbnb, and Etsy, are required to file an ‘information return’ to the CRA detailing Canadian users’ details and income generated on their platform. The deadline to share 2024 user details was Jan 31, 2025. H&R Block’s research revealed that 2 out of 3 (66 per cent) gig workers were not aware of these new rules. When they learned about the new rules, 71 per cent of gig workers said they were more inclined to declare their gig income. However, more than 1 in 3 (36 per cent) said despite learning of these new rules, they are still not inclined to report all gig income. 

Gig work is a side hustle for 90% of Canadian gig workers, representing an average 24% of their total income: Most gig workers (90 per cent) indicate it’s a second income to their primary employment, versus 10 per cent who say it’s their sole income. Overall, gig-related income represents an average 24 per cent of total income among gig workers. Gig-related income represents total income for 10 per cent of Canadian gig workers; up to 20 per cent of income for 69 per cent of gig workers; 20-50 per cent of income for 16 per cent of gig workers, and between 50-99 per cent for 15 per cent.

Gig workers increasingly open about side hustle with employers: There’s a continued shift in Canadians’ level of transparency in having a ‘second job’ with a majority (60 per cent) of gig workers who say their primary employer is aware of their side hustle, compared to 49 per cent a year ago. In contrast, this year’s study reveals that 40 per cent of gig workers say that their primary employer isn’t aware.  

Lack of understanding around gig job tax implications:  More than a quarter (27 per cent) of gig workers indicate that they don’t have a clear understanding of the tax implications of a gig income, and 37 per cent say they don’t fully understand any nuances between being a gig worker versus being classified as self-employed for tax purposes.

“For the most part, gig workers are essentially classified as self-employed for tax purposes,” said Lemay. “However, unlike more traditional self-employed Canadians, gig workers often receive T4A slips from their gig platforms. There are also nuances in the expenses and deductions that gig workers can claim, which are specific to the type of gig work they do.”

H&R Block points to key tax considerations for Canadian gig workers. 

• Gig platform income slip and tracking earnings: While gig workers don’t receive T4s, you may receive a T4A slip from the gig platform. If not, you must track and report earnings and expenses annually yourself.
• Tax filing forms required for gig workers: Any gig-related income should be reflected on Form T2125 Statement of Business or Professional Services, as well as any expenses incurred to earn this business income.
• Save income and expenses records for at least 6 years: It’s important to keep detailed records of annual income and expenses for at least six years, as the CRA and Revenu Quebec can request a review during that period.
• Put aside money for taxes: Taxes aren’t automatically deducted from your paycheque, so it’s important to set aside funds to pay income taxes in monthly or quarterly installments, or annually when you file your taxes.
• GST/ HST/ QST considerations: If your gig earnings exceed $30,000 over the past 4 consecutive calendar quarters, you’ll need to register for a GST/ HST/ QST number. It’s mandatory for ride-sharing drivers to register for a GST/ HST/ QST number before they start earning, but this doesn’t apply to drivers who only do deliveries.
• Gig and self-employed workers must contribute to CPP or QPP: If your gig income is more than $3,500, you need to contribute to the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP). The CRA calculates your contribution based on net business income level (all business income less any related expenses) for your tax return, so saving funds to cover your contribution will help come tax filing time.
• Employment Insurance (EI) is optional: EI contribution is optional for self-employed and gig workers in all provinces and territories. You can opt into the EI program by registering with the Canada Employment Insurance Commission for benefits such as maternity, parental, sickness, family caregiver, and compassionate care benefits.
• Filing gig income unlocks credits and benefits: Canadians can only access certain provincial and territorial tax credits and benefits by filing their taxes, such as GST/ HST credit and the Canada Child Benefit. Even if income is below the ‘basic personal amount’ (meaning you won’t owe federal taxes on it), you need to report your income to qualify for numerous benefits year-round.
• Potential RRSP advantages: Having more declared income can enable you to gain tax advantages by creating more room to contribute to your Registered Retirement Savings Plan (RRSP).
• Alignment with gig platform’s ‘information return’ reported income: Gig workers should ensure that the income they report to the CRA when they file their taxes is consistent with what their gig platform shared as part of their ‘information return.’
• Tax filing deadlines: Salaried employees are required to file their income by April 30 whereas gig workers must file by June 16, 2025. However, for all taxpayers, any taxes owing must be paid by April 30 to avoid interest and penalty charges.
• Gig workers are entitled to an array of deductions and credits: While the range of expenses you can claim depends on the type of gig work you are engaged with, they can include: auto and travel related expenses; tech related such as software subscriptions, mobile and internet bills; home office expenses; a portion of rent, mortgage interest, property taxes; advertising and marketing costs such as website and social media; administrative costs such as shipping, accounting and legal costs; meals and entertainment for clients; and professional development activities such as seminars or courses.

About the survey: The online survey commissioned by H&R Block was conducted by H&R Block in French and English from February 12-13, 2025, among a nationally representative sample of 1,790 Canadians members of the Angus Reid Forum. For comparison purposes only, samples of this size would yield a margin of error of plus or minus 2.3 percentage points at a 95 per cent confidence level.

About H&R Block Canada: A trusted partner of Canadians for 60 years, H&R Block Canada is Canada’s tax leader. Serving almost 1,000 locations across Canada, H&R Block’s team of Tax Experts use the latest in technological advances combined with real-world expertise to help people file taxes in office, through drop off service, upload their documents remotely, or use do-it-yourself Tax Software. H&R Block Canada can support in the preparation of personal, small business, corporate, U.S., rental, and estate taxes. H&R Block’s comprehensive education program, Tax Academy, trains new experts and ensures our Tax Experts continually update their skills. Learn more at www.hrblock.ca or 1-800-HRBLOCK.

SOURCE H&R Block Canada Inc.