Starting Your Freelance Business

The side hustle economy is booming in Canada, with more Gen Zers freelancing than any previous generation. Whether you are writing, designing, coding, or consulting, understanding the business basics will save you money and legal headaches down the road.

Business Registration

As a freelancer, you can operate as a sole proprietor using your personal name or register a business name. Registration is done through your provincial government and typically costs $50-100. You do not need to incorporate immediately โ€” sole proprietorship is simpler and sufficient for most starting out.

Get a business number from the CRA if you need to register for GST/HST or payroll. This is free and can be done online. Keep your business finances separate from personal โ€” open a dedicated business bank account to simplify accounting.

GST/HST Requirements

You must register for GST/HST once your worldwide revenue exceeds $30,000 in any 12-month period. You can also register voluntarily before reaching this threshold to claim input tax credits on business expenses. Current rates are 5% GST, with provinces adding PST or using HST (harmonized sales tax).

Charge GST/HST on all Canadian client invoices. International clients typically do not pay Canadian sales tax. Remit collected taxes to the CRA quarterly or annually depending on your revenue.

Tax Tips

Track all business expenses โ€” home office, internet, software, professional development, travel. These reduce your taxable income. Set aside 25-30% of every payment for taxes. Consider quarterly tax installments if you owe more than $3,000 annually. And hire an accountant if your situation gets complex โ€” their fee is tax-deductible.