In recent years, thousands of Canadians have launched side hustles and small businesses, many discovering new ways to earn extra income. Surveys conducted during and after the pandemic found a notable surge in entrepreneurship: a large share of newer ventures began during the pandemic, and many Canadians have continued to consider launching or expanding part-time businesses. Whether you’re testing an idea on evenings and weekends or planning to scale into a full-time operation, understanding the basics of starting and managing a side hustle will help you make smarter decisions.
Below is a practical guide to getting started, managing finances, handling taxes and finding inspiration. Each section links to further resources with detailed advice on topics such as bank accounts, registration, insurance and tax filing.
Starting a side hustle or small business
Getting started requires clear priorities: pick an idea that fits your skills, market demand and available time. Validate your concept, set up a simple business plan and decide on a structure (sole proprietorship vs. incorporation) that suits your goals. Below are curated articles with practical how-to guidance and idea prompts:
- How to make more money in Canada: 6 side hustle ideas
- The basics of starting your own business
- Can you make money on social media?
- How to make money selling stuff online
- How much money can you make driving for Uber?
- Ways to earn extra money during COVID-19
Rankings
Compare the best bank accounts for side hustles
Managing side hustle finances
Good financial management separates a hobby from a viable business. Open a separate bank account, track income and expenses precisely, and use simple accounting tools to stay organized. Consider business insurance, and if you incorporate, formalize payroll and dividend decisions.
- The 6 best bank accounts for side hustles in Canada
- Incorporated business owners: Should you pay yourself a salary?
- How the self-employed can get organized
- Getting paid in bitcoin: What you need to know
- What you should know about cryptocurrency tax in Canada
- How are you taxed when you sell a small business?
- How to become a digital nomad—and not go broke
- Should you incorporate your freelance business?
- 5 must-have insurance coverages for small businesses in Canada
Self-employed taxes in Canada
Understanding tax responsibilities is essential for all side hustlers. Keep records of every sale and expense, know filing deadlines, and be aware of when you must register for GST/HST. Proper planning reduces the chances of penalties and helps you claim eligible deductions.
- Income Tax Guide for Canadians: Deadlines, tax tips and more
- Self-employed? Here’s how to file taxes for a side hustle
- How to do your taxes and beat procrastination
- Tax traps for the self-employed
- Audit-proof your side hustle
- The tax brackets in Canada, broken down by income and province
- Do I need a GST or HST number?
Inspiration for entrepreneurs
Real stories can motivate and guide your next move. Read first-hand experiences from founders and creators who turned side projects into sustainable businesses. Their lessons cover risk-taking, financial planning and balancing personal priorities.
- Nathalie Smith on turning a passion project into a full-time franchise
- Journalist Renée Sylvestre-Williams on lessons she wishes she’d known earlier
- Erin Bury on leaving steady employment, investing early and managing risk
- Mallory Greene on building wealth without guilt and using leverage wisely
- Shane Murphy on creating meaningful work and preventing burnout
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Frequently asked questions about side hustles
What are the best side hustles in Canada?
Top side hustles combine low startup costs with demand and flexible hours. Popular options include freelance writing, online selling, ride-sharing, delivery services, tutoring, digital content creation and service-based businesses like pet care or home repairs. For a focused list of ideas, see How to make more money in Canada: 6 side hustle ideas.
What is the self-employed tax filing deadline?
If you’re self-employed (or your spouse/common-law partner is), the tax return filing deadline is typically in June for the previous tax year, while any tax owing is usually due by the standard April deadline (or the first business day after if it falls on a weekend). Keep an eye on the Canada Revenue Agency deadlines for the current year and plan to file on time to avoid penalties.
How much can you earn from self-employment before paying tax in Canada?
Any business income you earn must be reported on your tax return. The Canada Revenue Agency defines business income broadly to include earnings from professions, trades, or other profit-oriented activities where there is evidence of intent to profit. Employment income (wages from an employer) is reported differently. Even small amounts should be recorded and reported to remain compliant and to take advantage of deductible expenses.
What happens if you don’t report self-employment income?
Failing to report income can result in penalties and interest at both federal and provincial levels. If you discover an omission, consider voluntary disclosure options offered by tax authorities to correct past returns—addressing errors proactively typically reduces penalties compared with waiting for an audit or notice.
When does a side hustle have to start charging sales tax?
If your side business earns $30,000 or more in revenue (before expenses) within a single calendar quarter or across four consecutive quarters, you are generally required to register for a GST/HST number and begin charging sales tax. Track your revenue carefully so you can register and collect tax as required.
What self-employed tax deductions are available?
Self-employed individuals can claim many business-related expenses against income, including startup costs, home office expenses, insurance, legal and accounting fees, interest and bank charges, office supplies, utilities, advertising and vehicle expenses where applicable. Keep detailed records and consult CRA guidance or an accountant to ensure claims are eligible.
Are work clothes tax-deductible?
Uniforms and protective clothing that are required for your work may be deductible, but everyday clothing generally is not. The distinction depends on whether the apparel is specific to the job and not suitable for general wear. Check with a tax professional for guidance tailored to your circumstances.
How do you report self-employment income?
When filing your personal tax return, report your gross and net self-employment income on the designated lines for business income and expenses. If your business shows a loss, report it according to the instructions and keep documentation to support your figures.