Hey creator! You’re great on screen, we love your tips, and your metrics are off the charts. No wonder you’re taking the internet by storm. Whether your channel is a passion project, side hustle, or full-time vocation, if you’re creating content with the intention of making a profit, you’re officially running a business and the taxman wants his cut.
In this post, we’ll unbox the tax rules, benefits, and implications of being a social media influencer in Canada. We hope you give it a like and share!
- If you’re self-employed in Canada with an income greater than $30,000, you’ll need to register for a GST or HST number.
- Know exactly what income is taxable and report it accurately.
- Keep track of your expenses so you can reduce your taxable income.
Do YouTubers, TikTokers and influencers have to pay taxes in Canada?
Always.
If you post something and get paid for it, you pay taxes. If you’re compensated directly from the brands who sponsor you, you pay taxes. Gifts in Canada are not taxable unless from an employer – then there may be a taxable benefit. As long as the gift is not given in exchange for goods/services, then it is not taxable
If you’re self-employed in Canada with a business revenue greater than $30,000, you’ll need to register for a GST or HST number.
How do you file taxes as a content creator?
Most individuals who make money from social media are self-employed. This means you work for yourself as an independent contractor or sole proprietor. But in certain cases, it can make sense to incorporate. Here’s the difference from a tax perspective:
Independent contractors & sole proprietors
If you work for yourself (i.e. as a freelance blogger) or make any income from producing content, speaking at events, or selling merchandise, you’re considered self-employed.
Whether you identify as an independent contractor or sole proprietor, you’ll file using a T1 General personal tax return and complete the T2125 – Statement of Business or Professional Activities (conveniently located within the T1).
Corporation
Is your business expanding or starting to generate significant income? Are you thinking of hiring employees or taking on a partner?
These are among the many valid reasons to incorporate.
But it’ll bring more paperwork at tax time. Along with a T1 General personal tax return, you’ll also have to file a T2 Corporate Tax Return for your incorporated business.
TIP: Whether you break the internet as a sole proprietor or corporation really depends on the complexity and growth rate of your business. If you’re unsure, you can lean into the seasoned experts at TurboTax to help you make the right choice.
What income is taxable?
Everything you earn as a content creator counts as taxable income:
- If marketers pay you to promote their product on your channel or site, or if you refer your followers to theirs, that’s affiliate-related income.
- If you get speaking gigs and are paid cash or given an honorarium, you guessed it, that’s income.
- You receive gifts as compensation. Sweet, but the value of these gifts is considered income, and must be claimed as such.
Make sure you track what’s coming in, regardless of the source. Staying on top of your earnings and swag as it rolls in will keep your tax game strong. The one follower you don’t want is the taxman!
What expenses qualify as tax deductions?
Now, for the fun part. Let’s look at some of the tax advantages of being a social media entrepreneur. By claiming all business-related expenses against your earnings, you can significantly reduce your taxable income.
As a self-employed professional, you can write-off all the tools of your trade and expenses you incur while building your empire. This includes:
- car payments, gas, mileage, parking
- food, accommodations and business travel expenses for events
- home office square footage
- digital advertising to promote your services
- subscriptions to trade-specific publications
Some things such as computer equipment, smart phones, software, internet fees, camera, sound and lighting equipment cannot be written off as an expense. Instead they would be considered a capital expense. Learn more about capital expenses here, from the CRA itself.
Use our Self-Employed Expenses Calculator to see how effectively write-offs can lower your tax bill!
If you’re a creator, don’t miss our tax expert, Emily, share the top 10 tax deductions that can be taken off your plate, so you can focus on creating!
When is the tax deadline if I’m self-employed?
The tax filing deadline for individual 2023 tax returns is April 30, 2024.
If you’re self-employed, you have until June 15, 2024 to file. But there’s a catch: if you owe money, the CRA will charge you interest from May 1, 2024 onwards. The sooner you file, the sooner you’ll get your refund.
Keeping a detailed record of all your expenses makes things so much smoother at tax time.
The only tax checklist you need
Get organized and tackle your taxes like a pro.
This self-employed tax prep checklist helps identify and organize your expenses on time and accurately.
Keep more of your hard-earned money
Find unique deductions personalized to your line of work.
