New tax changes will affect Canadians who earn money using online apps

Whether you drive for ride-sharing apps or sell items online, the Canada Revenue Agency (CRA) has implemented changes that will affect you.

According to the CRA, “The gig economy generally refers to services provided through short-term contracts, freelance work, or other temporary work that is arranged through an online platform or mobile application.”

Some common platforms include Uber Eats, Skip the Dishes, and Fiverr, while common services can include web development, business consulting services, and writing and translation services.

New legislation has come into effect this year, making it mandatory for digital platform operators to report gig workers’ information to the CRA.

“This new legislation serves to address concerns among tax authorities that tax obligations are not being accurately calculated by digital platforms and that gig workers’ full income isn’t always visible to tax administrators,” states a release from tax preparation company H&R Block.

This means that gig platform operators such as Etsy, eBay, Poshmark, Airbnb, Vrbo, and Uber must provide workers’ income-related information by January 31, 2025.

So, what kind of information will be sent to the CRA?

Platform operators must share workers’ full names, dates of birth, primary addresses, and tax identification numbers (TINs). For most Canadians, TINs are their nine-digit social insurance numbers (SIN). In turn, companies must also provide users with a copy of information shared with the CRA.

Research by H&R Block revealed that in 2024, 9 million Canadians (28 per cent) made money through gigs. Thirty-two percent of them said they were willing to risk not declaring “any” income, and 43 per cent said that they were willing to risk not declaring “all” income so they could pay less in taxes.

Yannick Lemay, a tax expert at H&R Block Canada, warned that doing so comes with “significant risks” and is “effectively breaking the law.”

“The new reporting rules for gig platforms require operators to provide identifiable information on their users and their related income to the CRA,” he said.

“If these reported amounts are not aligned with what gig workers declare through their tax filing, it could create significant red flags with the tax authority and lead to potential financial penalties.”

To ensure you’re compliant, the CRA also suggests keeping records of all your transactions.

It advised, “Keep track of your income and expenses, including sales to buyers in Canada and other countries. “

Check on the CRA website to learn more about taxes for gig workers.