Cash-strapped Canadians taking on side hustles
“While Canadians appear tempted to not declare all or any gig-related income, this carries major risks. Ultimately, it’s breaking the law.” Yannick Lemay Tax expert
In these tough economic times, the ranks of Canadians taking on a side hustle to make ends meet is rising.
A new study from tax experts H&R Block Canada Inc found 28 per cent or nearly 9 million Canadians are now doing so-called “gig work,” up from 13 per cent in 2022.
Another 12 per cent are considering it.
The reasons seem obvious. As the cost of living and interest rates have risen over these past few years, more Canadians are finding their incomes stretched to the breaking point.
In the H&R survey, almost three in four respondents said the higher cost of living is making it hard to afford everyday expenses and 24 per cent are struggling to pay their bills.
So whether it’s freelance work, dog walking, home repair or delivery services or even just selling your stuff on marketplace platforms, “a huge contingent of Canadians report taking on gig work to boost their income,” said the report.
For the vast majority, 72 per cent, gig work is a second income to their day job, and 58 per cent report taking it on because of financial pressures.
However, when it comes to declaring that extra income, the study reveals that a significant number of the
gig workers are willing to take risks, said H&R Block.
Almost 30 per cent of the workers said they didn’t declare all of their gig income when they filed their taxes last year.
As the deadline for this year’s tax filing approaches, almost half, 43 per cent, say they’re willing to take the risk of not declaring all their gig income. A further 32 per cent say they will risk not declaring any of this extra income.
“While Canadians appear tempted to not declare all or any gig-related income, this carries major risks. Ultimately, it’s breaking the law,” said Yannick Lemay, a tax expert for H&R Block Canada.
“The Canada Revenue Agency and Revenu Québec can audit workers up to six years after the year they receive the income.”
And those risks are rising. H&R Block says new rules that require digital platform operators such as Uber, Instacart, Airbnb and Etsy to report income made by individual participants will be implemented during the 2025 season. But some may already be reporting to the CRA.
The good news is there are loads of deductions and credits gig workers can claim, though the survey also revealed that one in four workers don’t have a clear understanding of the tax implications of their side-hustle.
Depending on what the work is, Canadians can claim expenses for their car, software subscriptions, home office, phone and internet bills, shipping costs and more.
H&R Block says because gig workers don’t get T4s, it’s important to maintain detailed records of income and expenses annually and keep them for six years.