Gig Worker. Image credit: Wikimedia Commons
Gig work is classified, according to the Gig Economy Data Hub, as income-earning activities outside of standard, long-term employer-employee relationships. Examples of these jobs include construction work, Uber driving, freelance work, or dog walking.
“While it’s easy to think that smaller amounts may go unnoticed, by not declaring all income to the Canada Revenue Agency (CRA), Canadians face the risk of not just having to pony up for the full amount of taxes owing if they’re audited – but they’ll also be charged interest and could face substantial penalties if it’s discovered,” Yannick Lemay, learning program lead and tax specialist for H&R Block Canada, has said in a press release.
74 percent of Canadian gig workers have these kinds of jobs in addition to their primary source of income, such as their full time job.
With the growth of the gig work industry, one in five of gig workers (23 percent) said they do not fully understand how this kind of income needs to be filed at tax time.
Despite the fact that failing to claim all income at tax time is considered tax evasion and is a criminal offense, nearly half indicated on the survey that they are willing to risk not claiming the income from their side hustles.
This statistic is concerning considering the consequences of tax evasion could mean paying the full amount of owing taxes, plus interest and any civil penalties assessed by the CRA, being fined up to 200 percent of the taxes evaded, and even running the risk of a jail term of up to five years.
“The good news is there are literally hundreds of potential deductions and expenses that can be claimed; many of which put money back into your pocket,” said Lemay.
“The gig workforce is incredibly diverse, so navigating tax-related benefits can be complex. What’s important is having a full understanding of your specific tax situation, so you don’t inadvertently leave money on the table when filing your taxes.”
It was also found in the survey that 85 percent of Canadians are worried about their income not keeping up with the rising inflation, and 63 percent flag inflation as a major motivator to pick up a gig.
Since last year there’s been a surge in those working in the gig economy with 28 percent said in 2023 they had taken up a gig job, compared to 13 percent in 2022.
#Canada; #GigWorkers; #CanadaIncomeTax
