32% of Canadian Gig Workers Willing to Risk Not Declaring 'Any' Income; 43% Willing to Risk Not Declaring 'All' Income, Despite Evolving Tax Reporting Requirements for Digital Labour Platforms, Reveals New H&R Block Survey
Around 9 million (28% of Canadians) report being part of the gig economy -
- 73% of Canadians say increased living costs make it hard to afford everyday expenses
- 24% struggle to make ends meet
- 58% of gig workers took on gig work due to increased cost-of-living
- 74% of gig workers say it's a side hustle in addition to their primary employment
- 25% don't have a clear understanding of the tax implications of gig work
According to the survey commissioned by
When it comes to declaring gig-related income, the research reveals that a significant portion of gig workers are willing to take risks when filing their taxes. More than one in four (27%) gig workers said they didn't declare all of their gig income when they filed their taxes in 2023 (for 2022 tax year). Now that 2024 tax filing season is in full swing (for income earned in 2023), almost half of those surveyed (43%) said they're willing to take the risk of not declaring 'all' gig work related income, with a further 32% willing to take the risk of not declaring 'any' gig-related 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
Recent changes in how gig platforms report income:
More recently, there have been shifts in how some digital labour platforms are required to report income, in light of Bill C-47. This legislation serves to implement new reporting obligations for certain digital platform operators, which could include Uber, Instacart, Airbnb, Etsy and more, intended to help ensure users are compliant with their tax obligations and create more income tax-related transparency within the gig economy. Digital platform operators will have to report income incurred within the year by individual participants. These rules came into effect on
Gig workers are more open about their side hustle with employers: The research reveals there's been a significant shift in Canadians' level of transparency in having a 'second job' or 'work on the side.' Almost half (49%) of gig workers say their primary employer is aware of their side hustle versus 31% who said their primary employer isn't aware.
Lack of understanding around gig job tax implications: One in four gig workers (25%) indicate they don't have a clear understanding of the tax implications of a gig income. This might include knowing how to navigate having more than one income, and the differing tax requirements and considerations as a self-employed gig worker versus as an employee. For many gig workers, it can be challenging navigating the hundreds of tax credits and benefits to maximize their tax refund.
As we approach the peak of tax filing season,
Gig workers are entitled to a vast array of deductions and credits : The good news is there are numerous expenses, credits and deductions that gig workers can claim. While the range of expenses you can claim depends on the type of gig work you are engaged with, they can include:
- Auto-related expenses (kilometres related to the gig work, car maintenance in relation to work, etc.)
- Travel expenses
- Software subscriptions
- Home office expenses (such as portion of utilities, home repairs, cleaning costs, rent, mortgage interest, property taxes, and home insurance in relation to the size of the home office)
- Mobile phone and internet bills
- Advertising and marketing costs (such as website, social media)
- Shipping costs
- Accounting and legal costs
- Meals and entertainment for clients (at 50% deductible)
- Professional development activities, such as seminars or courses
- Interest or bank charges on money borrowed for business
No T4 – you're on your own for taxes owed: Being a gig worker is like being self-employed from a tax perspective. You don't get T4s, which means it's even more important to keep detailed records of income and expenses annually, and keep them for at least six years, as the CRA and Revenu Quebec can request a review anytime during that period. Your taxes aren't automatically deducted from your paycheque, which means you must set aside funds to pay your income taxes either in monthly installments or annually when you file your taxes.
GST/ HST/ QST considerations
: If your gig earnings exceed $30,000, you'll need to register for a GST/ HST/ QST number. If you're a ridesharing driver, you'll need to register before you make your first dollar. It's mandatory for ride-sharing drivers (including Uber, Lyft, and Eva) in every province to register for a GST/ HST/ QST number right away. This doesn't apply to drivers who only do deliveries (for example, if you have an
Gig and self-employed workers must contribute to CPP or QPP
: If your income is more than
Filing gig income unlocks access to credits and benefits: Canadians can only access certain provincial and territorial tax credits and benefits by filing their taxes, such as GST/ HST/ QST 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 earned income to qualify for a number of 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).
About the survey
The online survey was commissioned by
About
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