Updated Checked by the Tax-Services.ca editorial team How we check
Whether crowdfunding is taxable depends on what the money is for. Selling or pre-selling something makes it business income. Help through a rough patch with nothing sent back looks more like a gift. We found no CRA page that rules on crowdfunding as such, so this page uses the tests the CRA does publish.
When does crowdfunding count as business income?
The CRA defines a business as an activity you carry on for profit, backed by evidence that profit was your intention. It also tells you to include all your income when you work out your tax. That’s the test to run on your campaign, and it turns on the facts far more than on the platform you used.
A few questions help. Are you selling a product or service, or pre-selling one? Do backers get something worth money in return? Is the campaign part of something you already do to make a living? Yes to those points towards business income. A campaign to cover a funeral bill or a house fire points the other way, though we couldn’t confirm a CRA statement that gifts to an individual are never taxable, so check before you rely on that.
Picture Dana in Winnipeg, who launches a board game on a funding site. Backers pledge $25 each and get a copy next spring. That’s a pre-sale, and the money is income from a business, even though the game doesn’t exist yet. Compare that with a neighbour’s cousin whose basement flooded and who gets $300 from friends with nothing sent back. Same website, very different answer.
What do the different kinds of campaigns look like?
| Campaign | Likely tax question |
|---|---|
| Pre-selling a product or a game | Business income, with your costs as expenses |
| Rewards for backers worth real money | Part of it looks like a sale |
| Help with a personal emergency, nothing sent back | Looks like a gift, but not confirmed here |
| Backers get shares or a stake | Different rules, not covered here |
| You donate to someone else’s campaign | No credit unless a qualified donee issues a receipt |
That last row comes from the CRA’s gift rules. A gift is a voluntary transfer with nothing coming back. If a donor gets a benefit in return, the value of that benefit comes off the amount that counts as a gift.
What does business income cost you?
Take a designer who earns $50,000 from other work and nets $6,000 from a campaign after costs. The self-employed tax calculator puts federal and Ontario income tax at $7,165.78 without the campaign and $8,331.45 with it. That’s $1,165.67 more, plus $297.50 of CPP, so about $1,463 on $6,000. Call it a quarter of the money, give or take a few bucks.
The number is a rough one. That tool leaves out EI and business expenses beyond the net figure you enter, so use it to see the size, not the exact bill. Your marginal rate is the better guide, and the marginal tax rate calculator shows it.
Fees matter as well. Platforms and payment processors take a cut, and the fees on business income are normally an expense you can subtract. Keep the statements.
What if you also sell to backers?
Then think about sales tax. If the rewards are goods or services, GST/HST or provincial sales tax may apply to what backers pay you, and registration rules can kick in. The small supplier limit is $30,000 of taxable sales, and the CRA page on when to register explains the tests. The GST/HST calculator shows how much tax sits inside a price at your province’s rate.
Do you have to report it if the platform sends no slip?
Yes. Income counts whether or not a slip arrives, and platforms often don’t send one. Write down every payout as it lands, with the date and the amount before fees, so you aren’t rebuilding it from bank statements next April.
What penalties can apply if you leave it off?
The CRA’s repeated failure to report income penalty applies when you leave off $500 or more and also missed income on any of your three previous returns. It’s the lesser of 10% of the amount you failed to report or 50% of the understated tax less the tax already withheld. Separately, a false statement or omission made knowingly or through gross negligence carries a penalty of the greater of $100 or 50% of the understated tax. The CRA can relieve both if you come forward through the Voluntary Disclosures Program before it contacts you. Details are on the CRA’s page on false reporting and repeated failure to report income.
Mistakes and limits
A common one is mixing personal and campaign money. Open a separate account and note what each dollar was for. If the CRA ever asks, that record does the talking.
Investment or equity crowdfunding is a different subject with securities law attached, and we haven’t covered it. Neither have we covered a campaign run by a company or a charity. If your campaign is large, or backers get a share of profits, talk to an accountant before you launch, because the answer there isn’t a matter of reading one page.
How we checked the figures
The business test comes from the Canada Revenue Agency‘s pages on what a business is, and the gift rules from its guide on gifts and income tax. The example uses the 2026 federal and Ontario tax data behind our calculators. We checked the penalty rules in November 2026. This site isn’t connected to the CRA or any government.
Frequently asked questions
Is crowdfunding money taxable in Canada?
It depends on what it is for. Money from selling or pre-selling a product, or from a campaign that is part of how you earn a living, is business income. Help for a personal emergency with nothing sent back looks like a gift, but we found no CRA statement that gifts to an individual are never taxable.
Do I report crowdfunding if the platform sends no slip?
Yes. The CRA tells you to include all your income whether or not a slip arrives, and platforms often send none. Write down each payout as it lands, with the date and the amount before fees, so you are not rebuilding it from bank statements next April.
How much tax does crowdfunding business income cost?
Take a designer earning $50,000 elsewhere who nets $6,000 from a campaign. Our calculator puts the extra Ontario and federal income tax at $1,165.67 and the extra CPP at $297.50, about $1,463 or roughly a quarter of the money. It is a rough figure that leaves out EI and business expenses.
Can I deduct platform fees?
If the campaign is business income, fees taken by the platform and the payment processor are normally business expenses you can subtract. Keep the payout statements that show them. Mixing personal and campaign money makes this harder, so open a separate account and note what each dollar was for.
What happens if I leave it off my return?
The CRA can charge a repeated failure to report income penalty when you omit $500 or more and also missed income on any of your three previous returns. A knowing or grossly negligent omission carries the greater of $100 or 50% of the understated tax. Coming forward through the Voluntary Disclosures Program first can bring relief.
Do I charge GST/HST to backers?
Possibly. If the rewards are goods or services, GST/HST or provincial sales tax may apply to what backers pay. Registration is required once taxable sales pass the small supplier limit of $30,000 in one quarter or across four quarters. We did not confirm how that limit applies to a campaign, so check the CRA page.
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