CRA Tax Changes for Uber, Uber Eats & DoorDash Drivers in Canada

There are a lot of benefits to driving for Uber in Canada, including the amazing flexibility that comes with it. However, tax responsibilities for self-employed gig workers differ from those in traditional employment structures. The main thing to remember is that, as an Uber driver (or DoorDash or Lyft driver), you are actually classified as a self-employed independent contractor rather than an employee, so the tax rules are different. As an independent contractor (self-employed), you’re entirely responsible for your own income taxes. This means, unlike regular jobs, there won’t be any deductions taken out of your paychecks, so it’s on you to report all your earnings and handle your GST/HST obligations.

Whether you’re a full-time driver or just driving for extra cash on the side, managing your Uber taxes correctly is crucial to avoiding thousands in penalties and keeping more of your money in your pocket. Let’s break down the essential updates and clarify common tax scenarios for Uber drivers in Canada.

Mandatory CRA Reporting of Gig Worker Income (2025 Update)

This is arguably the most significant change impacting all gig workers.

As of January 2025, digital platforms like Uber, Uber Eats, DoorDash, and others are now mandated to report your gross income directly to the CRA. This includes your personal information such as your name, date of birth, address, and Social Insurance Number (SIN).
This direct reporting empowers the CRA with unprecedented visibility into your earnings. They will now be able to easily cross-reference the income you report on your tax return against what the platform reports on your behalf.
The days of potentially “flying under the radar” or misreporting income are effectively over. This change aims to ensure greater accuracy and compliance within the gig economy. Not declaring all your gig-related income now carries significantly higher risks of immediate detection, severe penalties, interest, and legal consequences.

GST/HST Registration Rules for Uber & UberEats Drivers

Understanding your GST/HST obligations is crucial, and they differ significantly between rideshare and food delivery services.

If you transport passengers, the CRA views this as a “taxi business” or “commercial passenger transportation.” This means you are required to register for a GST/HST number from your very first trip, regardless of how much you earn. There is no $30,000 small supplier threshold for rideshare services.
You must collect GST/HST on every fare you charge, report it to the CRA, and then remit (send) the net amount (GST/HST collected minus eligible Input Tax Credits or ITCs) when you file your GST/HST return.
If you only provide food or parcel delivery services, you generally fall under the “small supplier” rules. This means you do NOT need to register for a GST/HST number until your total gross revenue (before expenses) from these delivery services exceeds $30,000 in any single calendar quarter or over four consecutive calendar quarters.

Late Filing Penalty & Voluntary GST/HST Registration Benefits

Voluntary Registration Benefit: Even if you’re below the $30,000 threshold for delivery, you can choose to register voluntarily. The main benefit? You can claim Input Tax Credits (ITCs) on the GST/HST you pay on your business expenses (like gas, vehicle maintenance). This can result in a refund of the GST/HST paid on those expenses, putting money back in your pocket. However, you cannot claim ITCs for expenses like insurance or interest on vehicle financing, as these are not subject to GST/HST.
Late Filing Penalties: Missing your GST/HST filing deadlines can result in significant penalties, even if you owe no tax or are due a refund. The CRA applies penalties and interest on overdue amounts, and consistent non-filing can trigger audits.

Taxable Uber Earnings: What You Must Report

Every dollar you earn from your Uber activities is considered taxable income, and that absolutely includes tips.

Whether you receive tips in cash, directly through the Uber app, or via other methods, they are part of your gross business income. They are not taxed differently; they simply get lumped in with your fares and other earnings when calculating your total business income.
Since platforms generally don’t itemize cash tips, it’s entirely your responsibility to keep accurate records of all tips received to ensure full compliance.

How to Claim Mileage Log Deduction

If you want to claim vehicle expenses for your Uber driving, a detailed mileage log is not just a suggestion; it’s a mandatory requirement by the CRA.

Actual Expense Method Only: For all Uber drivers, the CRA requires you to use the “Actual Expense Method” for vehicle deductions. This means you can only claim the business portion of your real, documented costs.
No Kilometers, No Deduction: Without a precise mileage log showing your total kilometers driven for the year and the breakdown between business and personal use, the CRA will disallow your vehicle expense claims.

What a Log Needs: Your log must include:

Starting and ending odometer readings for your vehicle at the beginning and end of the tax year.
For each business trip: Date, starting point, destination, specific business purpose (e.g., “Uber ride – passenger trip”), and kilometers driven.

You cannot simply estimate your kilometers if the CRA audits you. They require verifiable records. The log is your proof. Utilize mileage tracking apps (e.g., MileIQ, Zoombooks) to automate this process. They use GPS to accurately record your trips and help categorize them.

Vehicle Depreciation (CCA) in Your First Year

There’s a common misconception among new Uber or rideshare drivers that you cannot claim Capital Cost Allowance (CCA), or depreciation, on your vehicle in its first year of business use. This isn’t accurate. Under Canadian tax rules, you generally can claim CCA on your vehicle in the very first year you start using it for your business.

The CRA’s half-year rule applies in that initial year. This means you can only deduct 50% of the normal CCA rate for your vehicle’s class, regardless of when during the year you started driving. This rule helps maintain consistency and fairness across all businesses.

To properly claim CCA as an Uber driver:

Track your business vs. personal vehicle use with a mileage log that includes odometer readings at the start and end of the year, plus records for each trip.
You can also deduct separate vehicle-related expenses like gas, insurance, maintenance, parking, and car washes — which are not part of the CCA but still reduce your taxable income.

Claiming Uber Expenses Without Receipts: What’s Allowed?

The CRA operates on the principle of “prove it or lose it” when it comes to business expenses.

Receipts Are Paramount: You can only claim expenses with receipts (gas, maintenance, insurance). Credit card statements or bank statements alone are typically not sufficient because they often lack the detailed description of what was purchased (e.g., “Esso” vs. “Gas for Uber trip”).
Audit Readiness: In an audit, the CRA will demand original, detailed receipts. If you can’t provide them, they will disallow the expense, potentially leading to increased tax payable, penalties, and interest.
Digital is Better: This is where digital record-keeping really shines. Apps like Zoombooks allow you to take a picture of your receipt right then and there, a choose a category and safely store it. And it will make tax time and any audit much easier.

Must Report Uber Income Even If You Earn Less

This isn’t just about compliance; it’s about optimizing your tax situation.

Claiming Expenses: Even if your Uber earnings are low, reporting them allows you to claim all your related business expenses. These expenses reduce your net income.
Potential Refund: If your eligible business expenses are significant, your net business income could be zero or even a loss. This loss can sometimes be used to offset other income (like from a full-time job), potentially leading to a tax refund from the CRA.
Establishing a Baseline: Consistently reporting income and expenses, even for lower amounts, establishes a clear history with the CRA and helps validate your business activity.

Full-Time Employee & Part-Time Uber Eats Driver

This is a very common situation, and it impacts your overall tax picture.

Combined Income: Your net income from Uber Eats (gross earnings minus eligible expenses, after the $30,000 small supplier rule for GST/HST) will be added to your employment income from your full-time job (reported on your T4).
Impact on Tax Bracket: This combined income will be taxed at your overall personal marginal tax rates. Your Uber Eats income will likely push you into a higher tax bracket than your full-time job alone would, meaning a larger portion of your Uber earnings will be taxed at that higher rate.
Avoiding Surprises: Since your full-time job has tax deducted at source, you might not feel the tax burden from Uber until tax time. It’s crucial to estimate your net Uber income and set aside money (e.g., 20-30%) throughout the year to cover the additional income tax and CPP contributions that will be due. Consider increasing deductions at your regular job or making tax installments if you anticipate owing a significant amount.

Uber Tax Summary vs. Employee T4

This is fundamental to understanding your role as a self-employed individual.

Uber Tax Summary (Your Business Report): Uber provides drivers with a Tax Summary (or similar documents) that outlines your gross earnings, Uber’s fees, and potentially other details. This is NOT a T4. It’s a summary to help you prepare your self-employment income and expense statement. It does not include all your deductible expenses (like gas, car washes, insurance, etc.) nor does it account for your personal versus business mileage.
Employee T4 (Employer-Provided): A T4 slip is issued by an employer to an employee. It shows your gross employment income and all the taxes and deductions (like income tax, CPP, EI) that have already been withheld from your paycheque.
Your Responsibility: As an Uber driver, you are self-employed. No tax is automatically withheld from your Uber earnings (unless you drive in Quebec for GST/QST, where Uber remits it for you, but you still need to file annually). It’s entirely your responsibility to track income and expenses, calculate your net profit, and pay your taxes to the CRA.

The Bottom Line

The Canadian tax system for gig workers can seem complex, but with the right approach and the new 2025 reporting mandates, taking control of your tax situation is no longer optional – it’s essential.

Utilize apps for mileage and expense tracking.
Keep an eye on CRA updates and guidance.

Many Canadians still feel tempted not to declare all their gig income, or struggle with maximizing deductions. Don’t fall into this trap. A qualified tax professional specializing in self-employment and the gig economy can be your best partner. They can ensure you’re compliant, help you claim all eligible benefits, and assist you in navigating the Canadian system confidently. Drive smart, not sorry!

FAQs: Your Uber Tax Questions Answered

Q: Can I claim expenses without a mileage log?

A: No. For vehicle expenses (gas, maintenance, insurance, CCA), the CRA strictly requires a detailed mileage log to prove the business-use percentage of your vehicle. Non-vehicle expenses (e.g., Uber fees, phone bill) can be claimed with receipts, but vehicle expenses are heavily scrutinized.

Q: How do I report tips separately?

A: All tips, whether app-based (reported on your platform summary) or cash, are considered taxable business income. You report them as part of your gross business income on Form T2125. They are not taxed differently; they simply contribute to your total business income.

Q: Does Uber/DoorDash/Lyft withhold taxes?

A: Generally, no, not for federal income tax or CPP. You receive your gross earnings, less their fees and commissions. The notable exception is in Quebec, where Uber acts as a mandatary for GST/QST for some drivers and remits these taxes directly to Revenu Québec. For federal taxes, it’s always your responsibility to save and remit.

Q: What if I already have a full-time job? How will my gig income affect my overall tax bracket?

A: Your net gig income (gross earnings minus deductible expenses) is added to all your other income sources (like your T4 income from your full-time job). This combined total determines your overall taxable income and, therefore, your marginal tax rate. It’s common for gig income to push individuals into a higher tax bracket, leading to a larger overall tax bill. This is why it is so important to track your expenses properly and do your tax planning.

Q: How do I justify my kilometre estimate if the CRA audits me without a perfect log?

A: This is very, very tough, if not impossible to do correctly. The CRA explicitly requires tracking to be done in a log, not an estimate. While some flexibility may exist for minor discrepancies if the overall log is robust, relying solely on an estimate will likely result in the disallowance of vehicle expenses during an audit. Maintain a real, consistent log from the very beginning.