Why is an investing website talking about goods and service tax/harmozined sales tax (GST/HST)? Let’s clear the air first. Canada’s gig economy has grown significantly, with many Canadians doing a side hustle alongside their main job. A graphic designer might be a content creator, or a music editor might be a yoga instructor on weekends.
If you are spending money on your side hustle, not having a GST/HST number is leaving money on the table. Many Canadians delay investments as they have nothing left after expenses. What if these expenses can unlock the money to invest?
Let’s find some money to invest.
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When does a side hustle need a GST/HST number?
The Canada Revenue Agency (CRA) requires businesses, including gig workers and freelancers, to register for GST/HST if their revenue from a side hustle exceeds $30,000 in the past four consecutive calendar quarters.
Once you exceed the threshold, the CRA gives you 30 days to register and start collecting GST/HST from clients and remitting it to the CRA. Many avoid hitting this threshold given the extra paperwork of filing GST/HST returns. What one doesn’t see is that GST filing introduces the input tax credit (ITC) claim.
How to make the most of your GST/HST number
If you pay GST on a good or service that is necessary to perform your side hustle, you can claim ITC for it. Let’s understand with an example. Maya started a corporate packaging business alongside her job and paid $500 GST on an e-commerce subscription, packaging material, display products, advertising, and delivery fees. She got a GST number for her side hustle even if she did not hit the revenue threshold. Here’s why.
Her 2026 revenue was $15,000. Because she had a GST number, she could collect 5% GST of $750 from her clients. She can claim the $500 GST she paid for business expenses as ITC and remit the remaining $250 to the CRA. Had she avoided getting a GST number, the $500 would be left on the table to avoid extra tax filing and documentation.
ITC has no upper threshold. You can claim ITC on the GST you paid for your business expenses, and this claim can run into thousands of dollars if it was a good year for your gig.
ITC is different from CGEB
Do not confuse ITC with the Canada Groceries and Essentials Benefit (CGEB), previously called the GST/HST credit. You do not need a GST number to claim CGEB. This benefit has a cap of $679 for a single individual for the July 2026 to June 2027 benefit year and is automatically credited to your bank account registered with the CRA.
How side hustle expenses can meet your investment needs
The ITC can help you unlock money from your side hustle and use it for investments. Consider investing through a Tax-Free Savings Account (TFSA), as ITC is not added to your personal tax, and the TFSA will keep your investment income tax-free.
If you are looking to invest and don’t know where to begin, Royal Bank of Canada (TSX: RY) is a good stock to begin with. This large-cap stock has been in the banking business for over 150 years and is deeply integrated into the Canadian economy. This one stock can give you three benefits: capital appreciation, dividend growth, and dividend reinvestment. The bank offers commercial and personal banking and wealth management services. It earns from net interest income and fees on assets under management (AUM).
RBC’s share price increases as the value of its loan portfolio and AUM increases. Its dividend grows when net income grows. The bank aims to maintain a payout ratio between 40% and 50% of net income and use the surplus to buy back shares. Financial discipline and conservative lending have helped it grow dividends in 24 out of the last 26 years. The only two years without dividend growth were 2009 and 2010 due to the Global Financial Crisis. The fact that RBC sustained its dividends when too-big-to-fail banks failed in the neighbourhood down south shows its financial stability.
Low risk, stability, and growth make RBC a beginner’s stock.
