Uber and Rideshare Drivers — What You Need to Know About Filing Taxes in Canada
For Uber, Lyft, SkipTheDishes, and other delivery or rideshare drivers — here’s everything you need to know
about filing your taxes correctly in Canada.
1. Rideshare Income Is Considered Self-Employed Income
As a rideshare driver, your earnings are treated as commission income
and defined by the CRA as self-employed income,
similar to a traditional taxi driver’s income.
When filing your personal tax return, you must complete Form T2125
to report your self-employment income and related business expenses.
2. Common Deductible Expenses
You can deduct reasonable expenses directly related to your rideshare business, such as:
- Gas and fuel costs
- Vehicle lease payments
- Car maintenance and repairs
- Car insurance
- Depreciation (if you own the car; leased cars don’t depreciate)
- Interest on car loans
- Parking fees and tolls
- Mobile phone expenses
- Accounting and bookkeeping fees
Deduction Limits
- Maximum deductible lease payment: $800 + tax per month.
- For vehicles purchased over $30,000, depreciation is limited to $30,000 + tax.
- Loan interest deduction limit: $300 per month.
3. Keep All Original Receipts
You must keep all receipts for business-related expenses for at least
six years in case of a CRA audit.
4. Zero-Emission Vehicle Incentives
Vehicles purchased between March 19 and January 1, 2024
that qualify as zero-emission vehicles
may be eligible for government rebates or accelerated depreciation.
5. Keep a Driving Log (Auto Log)
CRA requires rideshare drivers to maintain a vehicle logbook
to calculate the portion of driving used for business.
Only business-use mileage can be claimed for deductions.
Your Auto Log Must Include:
-
Business trip details: Date, time, start and end locations,
and kilometers driven for each trip. -
Total mileage records: Record odometer readings at the beginning
(e.g., January 1) and end (e.g., December 31) of each year.
It’s best to take photos of your odometer as proof.
6. GST/HST Registration Requirements
CRA considers rideshare income subject to GST or HST, depending on your province
(e.g., BC – 5%, ON – 13%).
If your total gross commissions exceed $30,000 in any consecutive four-quarter period,
you must register for a GST/HST account.
Even if your income is under $30,000, you can register voluntarily.
Here’s why registering can be beneficial:
- Uber or other platforms will pay you the GST/HST portion of your fares, which must be remitted to CRA.
- You can claim back the GST/HST paid on your business expenses through Input Tax Credits (ITCs).
-
The difference between GST/HST collected and GST/HST paid is what you remit to CRA —
reducing your actual out-of-pocket expenses.
Once registered, you’ll need to file a separate GST/HST return each year.
Keep accurate records of your GST/HST collected and paid — and track your net expenses for each category.
7. Annual Income and Tax Forms
Reputable rideshare companies such as Uber, SkipTheDishes, and Lyft
issue an annual T4A statement showing your total income,
which is also submitted to the CRA.
These companies usually provide detailed GST/HST breakdowns for your earnings.
Your responsibility is to maintain and store receipts for your expenses and mileage logs.
8. Tax Deadlines
- Personal and GST/HST filing deadline: June 15 each year.
- Tax payment deadline: April 30.
Payments made after these dates are subject to interest and late penalties.
9. Professional Help Makes a Difference
While joining the rideshare industry is easy, its tax rules can be complex.
Entrusting your self-employed tax filing to a professional CPA is a smart move
that ensures compliance and maximizes deductions.
If you need help with your Uber or self-employed tax filing, contact us today!
