If you drive for an app, you are running a small business. That means HST and a self-employed tax return. Here are the basics.
Do I need to register for HST?
- Rideshare drivers (Uber, Lyft and taxis): you must register for GST/HST before your first ride, no matter how little you earn. The usual $30,000 small-supplier exemption does not apply to carrying passengers.
- Food and parcel delivery only: you generally follow the normal rule and must register once your taxable revenue passes $30,000 in a single quarter or over four consecutive quarters.
Filing your HST returns
Most drivers file annually or quarterly. Your app's annual tax summary shows your fares, fees and the HST involved. You can usually claim input tax credits for the HST you paid on business costs such as fuel, maintenance and your phone, which reduces what you owe.
Your income tax return
Your driving income goes on form T2125 with your personal return. You can deduct the business share of:
- Fuel, insurance, repairs and maintenance
- Licence and registration fees
- Car washes, parking and tolls while working
- Your phone and data plan
- Capital cost allowance (depreciation) on your vehicle, or lease payments
The business share is based on business kilometres divided by total kilometres, so keep a simple log. A notebook or app is enough.
Avoid surprises
No tax is withheld from app income. Set aside money for income tax and HST every week, and expect CRA instalment reminders once you owe more than $3,000 in a year.
Behind on HST or not sure if you're registered? We can help you catch up. Book a free 15-minute call.
This article is general information, not tax advice. Rules and amounts change; contact us about your situation.