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As a sole proprietor you report business income on your own return. Register for GST/HST once taxable sales pass $30,000 over four quarters, expect to pay tax by instalments, and keep your records for six years.
Start a business and you stop being a person with a tax slip. You’re now the one who counts the income, finds the receipts and sends the money in, and nobody does it for you if you forget.
What do you report?
As a sole proprietor you report business income and expenses on your own return, and the profit is taxed at your personal rates. You also pay both halves of CPP, the employee share and the employer share, because you’re both. Estimate it with the self-employed tax calculator, and see our expense checklist for the costs people forget.
Say Priya in Winnipeg starts a bookkeeping side gig. Nobody sends her a pay stub, so her own invoices become the income line on her return.
When do you register for GST/HST?
You must register once your taxable sales pass $30,000 across four consecutive calendar quarters. Before that you’re a small supplier. You can still register earlier, and that lets you claim back the tax you pay on business costs. The catch is that you then have to charge the tax on what you sell. The sales tax guide explains how.
What about paying during the year?
Nobody takes tax off your income any more, so the CRA may ask you to pay in quarterly instalments. The instalments calculator shows the amounts, and the dates are on the tax calendar. A few bucks set aside from every invoice, kept in a separate account, makes the bill a lot less scary.
How long should you keep your records?
Keep every receipt. Records matter more than any trick, and you should hold them for six years. For more, read the self-employed and small business guide.
What mistake do new owners make most?
Mixing personal and business money. A separate bank account costs little and saves hours later.
Before you act on this page
You’re reading a general overview, and it can’t see your slips, your province or your family, so you shouldn’t treat it as advice for your own return. If anything here doesn’t match a letter from the CRA, the letter wins.
Stuck?
Ask a qualified preparer or the CRA itself, and keep the document checklist, the tax calendar and the filing guide close by. Not sure which province’s rules apply to you? The province index lists them all.
Frequently asked questions
When must I register for GST/HST?
When your taxable sales pass $30,000 over four consecutive calendar quarters. You may register earlier if you want to claim input tax credits.
When is a self-employed tax return due?
June 15, but any tax you owe is still due April 30.
Do I need a separate bank account?
The CRA doesn't require one for a sole proprietor, but it makes your records much cleaner and your life easier at tax time.
How long do I keep my records?
Generally six years from the end of the tax year they relate to.