How it’s taxed
- Your profit (income minus expenses) is added to your other income and taxed at your marginal rate.
- CPP: 11.9% on total earnings between $3,500 and $74,600, and 8% between $74,600 and $85,000. Half is deducted from income.
- No EI, unless you opt in to the special benefits program.
How much to set aside
In Ontario for 2026, $10,000 of side profit on top of a $50,000 salary costs about $3,092 in tax and CPP (31%). On top of a $100,000 salary it costs about $3,174 (32%), with no CPP because the salary already covers it. Try your numbers in the side hustle tax calculator.
Instalments
For 2026 you pay quarterly instalments if you owe more than $3,000 at filing ($1,800 of federal tax in Quebec) and you also did for 2025 or 2024. Due dates are March 16, June 15, September 15 and December 15, 2026.
GST/HST
Register once taxable sales pass $30,000 in one calendar quarter or over four consecutive quarters. Ride-sharing drivers must register from their first fare. Rates range from 5% GST in Alberta and the territories to 15% HST in the Atlantic provinces other than Nova Scotia (14%).
Deadlines
- April 30, 2027: pay any 2026 balance owing.
- June 15, 2027: file your 2026 return with form T2125.
Frequently asked questions
Can I deduct a home office?
Yes, if you work from home regularly for the business, you can deduct a share of eligible home costs based on the space used. Keep records.
Do I need a business number?
Only once you register for GST/HST or payroll. A sole proprietor reports business income on their personal return with form T2125.