Your Uber job may be a great way to earn some income but don't forget about your tax bill. Let's go over what taxes Uber drivers have to pay, as well as some additional tax tips.
The CRA considers Uber drivers as self-employed, so you'll follow similar rules. As of July 1, 2017, federal and/or provincial taxes are added to fares when clients book a ride. Drivers are required to register for a GST/HST account within 30 days of their first trip. Quebec drivers must have a QST number before they begin providing services.
It used to be that only drivers who made $30,000 per year or more had to charge and remit GST/HST. However, the CRA implemented new rules effective July 1, 2017. Possibly due to the rise of Uber and Lyft, the GST/HST definition of "taxi business" was amended in the Excise Tax Act. In March 2016, Susie Heath, Uber Canada Senior Communications Associate, told the CBC: "As with any company that uses independent contractors, it is the responsibility of the contractor to remit their taxes as required by the CRA." Under the new rules, self-employed commercial ride-sharing drivers such as Uber's are required to:
The CRA encourages self-employed commercial ride-sharing drivers to register for the GST/HST using Business Registration Online. Quebec drivers need a QST number to drive for Uber. To get one, applicants have several options:
Uber collects and remits QST and GST for Quebec drivers. In the rest of Canada, Uber collects HST/GST automatically and sends it to drivers on a weekly basis so that it can be remitted.
You can find most of the tax information you need in your Uber profile. Just click on the "Tax Summary" section to find your total earnings and other tax information. Uber said it will soon provide the amount of HST you have collected in this section.
Here are some useful tax tips Uber drivers should remember:
All Canadian taxpayers who earn more than $3,500 per year are also required to make contributions to the Canada Pension Plan (CPP). CPP contribution rates are based on net business income (after expenses). Quebec residents pay into the Quebec Pension Plan (QPP), with the same basic exemption of $3,500.