Updated Checked by the Tax-Services.ca editorial team How we check
Etsy taxes in Canada come down to two questions. Is your profit taxable income? Yes, every dollar, even on a side shop. And do you have to charge GST/HST? Only once your taxable sales pass $30,000 in a single calendar quarter or over four quarters in a row.
We use Etsy as the example because that’s what you searched for. The rules below follow the seller, not the platform, and we haven’t checked what any marketplace does on its end, so we make no claims about its fees or tools.
Is Etsy income taxable in Canada?
Yes. The CRA’s guidance for online marketplace sellers sits with sole proprietors, so you report the shop on Form T2125, Statement of Business or Professional Activities, attached to your personal return. Your sales count if you got cash, goods or credits. The CRA counts income of any kind that has a monetary or bartering value.
A second point catches newer sellers. Since 1 January 2024, digital platforms must report certain seller details to the CRA each year, and they must give you a copy by 31 January of the following year. So assume the CRA can see your sales. Reporting them yourself is easier than explaining later why you didn’t.
When do you have to charge GST/HST?
You’re a small supplier, and exempt from registering, while your worldwide taxable revenue before expenses stays at $30,000 or less in every single quarter and across the last four quarters. Go over in either test and you stop being a small supplier. You then have 29 days from the day you crossed the line to register.
You stopped being a small supplier the day you exceed the $30,000 threshold in one calendar quarter.
When to register for and start charging the GST/HST, canada.ca
Note the word revenue. It’s sales, not profit, so a shop that nets $15,000 after materials can still cross the line. Associates’ sales can be counted with yours too.
| Where your buyer is | Sales tax rate once you’re registered |
|---|---|
| Ontario | 13% HST |
| Nova Scotia | 14% HST |
| New Brunswick, Newfoundland and Labrador, PEI | 15% HST |
| Alberta and the territories | 5% GST |
| British Columbia | 5% GST plus 7% PST |
| Saskatchewan | 5% GST plus 6% PST |
| Quebec | 5% GST plus 9.975% QST |
Those come from the CRA’s rate table, and the Quebec rate from Revenu Quebec. Provincial sales taxes have their own registration rules, and we did not check the small-seller rules for each. The GST/HST calculator does the maths on a price, and the GST and QST calculator covers Quebec.
Once you’re registered, the tax goes on top of your price. Say you sell a handmade candle at $24 to a buyer in Ontario. The HST is $3.12, so the buyer pays $27.12, and the $3.12 isn’t yours to keep.
What does a typical shop pay in income tax?
Take an Ontario seller with $35,000 in sales and $12,000 in costs, so $23,000 net. Those costs might be $9,000 of materials, $2,000 of platform fees and $1,000 of shipping and packaging. On the $23,000, federal and Ontario tax come to about $1,602, using basic personal amounts only. Then there’s CPP. A self-employed person pays both halves, which is 11.9% of net earnings above $3,500, or $2,320.50 here.
So the side shop costs roughly $3,900 before any other credit, about 17% of the profit. The self-employed tax calculator lets you change the numbers. Fair warning: it lets deductions lower income tax but not CPP and leaves out EI, so check its CPP line against the figure above.
Our sample seller is also over $30,000 in sales, so they’d have to register for GST/HST, and whatever they charge belongs to the government, not to them.
Mistakes that hurt sellers
Counting only what lands in your bank account. The CRA wants sales, and platform fees are a cost you deduct, not something you net off the sales line. Write fees down and keep the statement.
Forgetting the four-quarter test. A strong December can push a rolling year past $30,000 even if no single quarter did.
Skipping instalments. Once you owe real tax each year, the CRA may ask for payments during the year, and the tax instalments calculator shows a rough schedule.
Mixing your own money with shop money. A separate bank account costs little and saves hours at filing time.
Do you have to report a shop that barely makes money?
If it’s a real shop with real sales, yes. Even a quiet year goes on the T2125, and a loss is still worth recording. We haven’t found a dollar amount below which sales can be ignored, so don’t assume there is one. Keep a simple sheet of sales, fees and supply costs from the first order, and the filing is a half-hour job instead of a weekend.
The sources behind this page
The CRA pages on Form T2125, the small supplier rules, the digital platform reporting rules and the GST/HST rate table, plus Revenu Quebec for the QST rate. The income tax and CPP figures use the 2026 federal and Ontario data in our engine. We could not confirm any figure about Etsy itself, so check its seller terms for fees. This website is not connected to the CRA or to any marketplace.
Frequently asked questions
Do I pay tax on Etsy sales in Canada?
Yes. Profit from selling online is business income, reported on Form T2125 with your personal return.
When must an Etsy seller register for GST/HST?
Once taxable revenue passes $30,000 in a single calendar quarter or over four consecutive quarters. You then have 29 days to register.
Does the $30,000 limit count profit or sales?
Sales before expenses. A shop with a small profit can still pass it.
Will the CRA know about my Etsy income?
Digital platforms report certain seller information to the CRA each year under rules in force since 1 January 2024, and sellers get a copy by 31 January.
Do I need to report Etsy income if I sell only a little?
Yes, business income is taxable whatever the amount. Keeping it on T2125 is the way to report it.
- How Canadian income tax works: brackets and credits
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