Side Hustles in Canada: Income, Tax and Business Questions to Weigh

Side income is already part of many Canadian households’ budgets, but the work can grow faster than the plan around it. A 2026 survey found that 23% of Canadians earn money from a side hustle, while another 24% want to start one. The findings point to a practical tension: people may see a small venture as extra cash, even as it brings customer, record-keeping and tax responsibilities.

The figures come from Ownr’s 2026 Canadian Side Hustle Report, released October 8. Ipsos surveyed 1,501 Canadian adults in early September. Ownr, an online business registration and incorporation platform owned by RBCx, sells services to people starting businesses, so readers should keep that commercial context in mind when weighing the report’s findings.

Extra income is the main draw

People’s reasons vary by age group, but money sits at the centre of the report. Side hustlers cited topping up their regular income, higher living costs and debt as leading concerns. Gen Z respondents pointed to living costs and earning money from a pastime. Millennials were more focused on paying down debt, while Gen X and boomers mostly wanted additional income.

A separate 2026 Small Business Poll from RBC, published in September, found that nearly half of Gen Z business owners were running a venture alongside a full-time job. The two surveys suggest that side work can fit around a main job, though fitting it in doesn’t make it effortless.

Respondents reported spending an average of 13 hours a week on their ventures; 14% said they put in nearly 20 hours. That time has to come from somewhere, whether it’s rest, family commitments or other paid work. Anyone considering a side gig may find it useful to estimate weekly hours before counting on the income, especially if customer demand is unpredictable.

When a side gig starts to feel like a business

About 43% of side hustlers already consider their activity a real business. Among Gen Z side hustlers, the share is 55%. Some also see a route to working for themselves: 19% said they were likely to leave their job and go full-time, and 22% said their side hustle already earned enough that they didn’t need a regular job.

Those intentions don’t necessarily mean the income is steady enough to replace employment. Most respondents who might go full-time said they would first want their venture to pay more than their day job or become consistently profitable. Benefits and retirement savings can also affect the decision. A household comparing self-employment income with a paycheque may need to account for these features, along with the extra time spent running the venture.

Finding customers was the most commonly reported obstacle, followed by finding enough time alongside another job and everyday responsibilities. That points to a useful early check: consider not only what the work might earn, but also how customers will find it and how much time each sale or project will take.

Registration and tax questions deserve early attention

Many respondents were uncertain about the business details. The report says 37% didn’t know when they needed to register, 38% didn’t understand which legal requirements applied to them, and 42% weren’t sure whether incorporation was suitable. Women were less likely than men to say they knew when to register or understood their tax obligations.

For tax reporting, the Canada Revenue Agency says residents must report all self-employment income, including earnings from gig and platform work. Because income may arrive without tax withheld, setting aside part of each payment can help avoid a large bill later. Keep records of earnings and expenses as they come in; the source also recommends tracking documents for a side hustle and making a financial plan for irregular income.

Self-employed people may also owe Canada Pension Plan contributions. The linked guide explains that they pay both the employee and employer shares. The total cost can therefore differ from what a worker sees deducted from a regular paycheque. For platform sellers, the CRA may cross-check reported income; see the guide to tax on digital-platform income.

Watch sales thresholds and keep receipts

GST/HST registration is another point to check. In general, the source says registration is required once taxable sales exceed $30,000 over four calendar quarters. Some activities, including commercial ridesharing, follow different rules. The threshold concerns taxable sales, so it shouldn’t be treated as a universal rule for every kind of side income.

The linked GST/HST number explainer notes that someone can register before sales pass $30,000. Charging tax earlier may help avoid a sudden obligation if sales rise, but it also means handling and remitting the tax. Reasonable business expenses may be deductible, so save receipts and keep clear records rather than trying to reconstruct spending later.

Think about where extra income goes

Side income can also create room to save. Self-employment earnings can build RRSP contribution room, and contributing in a higher-income year may produce a larger deduction. Check your available amount with the guide to RRSP contribution limits. A TFSA contribution room calculator can help people check a different savings option.

The main takeaway from the report is that a side hustle can be both a source of needed cash and a small business with time and record-keeping demands. Before relying on the income, map out the hours, customer pipeline, taxes and costs that come with it. For ideas, MoneySense has a list of Canadian side hustle options, along with pieces on when to step away.

More related reading: side hustle ideas, keeping side-hustle records and digital-platform income taxes. MoneySense also offers a newsletter signup for financial tips and news.