If this is your first time filing a Canadian personal income tax return (T1) and declaring self-employed income, in addition to completing the T2125, you will need to provide the CRA with your Industry Code – also referred to as a Standardized Industry Code (SIC).
Self-employment income is reported on Form T2125, Statement of Business or Professional Activities, and on this form there must be an industry code which corresponds to your main self-employed business activity. Without an industry code you cannot use the CRA’s NETFILE to electronically file your return.
If you are paper filing your return use the industry codes from the CRA website. If you are using software to Netfile your tax return, such as TurboTax, then you have to use the North American Industry Classification System codes (NAICS) maintained by Statistics Canada.
What is an Industry Code?
An industry code is a 6-digit number used to identify the type of business you are operating. For tax purposes, all self-employment activities, even freelance and “gig” work, are considered to be “business activities”. Everything from retail shops to housecleaning to pet sitting has a code to match.
Industry codes are used by Statistics Canada to keep track of business trends, and the CRA uses these codes to compare businesses in the same industry as it seeks outliers for which to review in greater detail or audit.
How Can I Find My Industry Code?
If you’re a TurboTax user, we’ve got you covered. Use the industry code provided within the software. When you come to the spot in your return to enter your industry code, use the “Guide Me” feature to find the code that best suits your business. Start with selecting the category of your business. Then narrow it down by subcategories to find the code that matches your business. If your business has more than one activity, choose the code that best describes your main activity.
What if None of These Codes Describe Your Business?
With all the different self-employment ventures available, it would be impossible to have a code for each individual business. If you don’t find a code that exactly matches your line of business, there are catch-all options available. Look for the words “miscellaneous” or “all other”.
If your business is breeding and selling albino gerbils, you won’t find an industry code for “gerbil breeders”, so instead, you would select the category “Services”, then the subcategory “Agricultural or Animal Services”. From the options that appear, code 112999 – All Other Miscellaneous Animal Production – would be the best choice.
Using tax preparation software designed for self-employed people takes the guesswork out of income taxes. With step-by-step instructions and easy-to-follow guides, TurboTax Self-Employed helps make filing your taxes smooth & easy.
But, if you feel a bit overwhelmed, consider TurboTax Live Assist & Review, Self-Employed, and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service for Self-Employed* and have one of our tax experts do you return from start to finish.
*TurboTax Live™ Full Service is not available in Quebec.
Jennifer is the Social Care Manager for TurboTax Canada. When she’s not helping customers on Facebook, Twitter, and TurboTax’s community forum AnswerXchange, Jennifer is busy researching the latest tax changes.
Jennifer has been preparing tax returns for over 30 years and enjoys holding tax seminars for seniors in her hometown of St. Vincent’s, Newfoundland.