A lot of new business owners and freelancers ask:
“If I made under $30,000, do I need to report it?”
Yes — you must report all business income, no matter the amount.
The $30,000 threshold people talk about is for GST/HST, not for income tax.
Let’s break it down clearly.
1. You Must Report All Business Income
Whether you made $500, $5,000, or $20,000 — business income must be reported on your tax return.
The CRA does not have a minimum threshold for reporting business income.
2. What the $30,000 Rule Actually Means
The $30,000 rule only applies to GST/HST, and it works like this:
- If your business earns less than $30,000 in a 12-month period, you are considered a Small Supplier
- Small suppliers do NOT need to register for GST/HST ***
- Once you exceed $30,000 within four consecutive quarters (12 months), you must register and start charging GST/HST
*** There are many situations where it is best to register for HST from day one. See #4 below.
3. Why Reporting Small Amounts of Income Helps You
Reporting business income allows you to claim:
- Startup costs
- Home office expenses
- Internet and phone
- Equipment
- Supplies
- Travel
- Meals (50%)
- Vehicle expenses (if eligible)
Many small businesses save money by reporting income because the deductions lower taxable income.
4. Why You Might Want to Voluntarily Register Your Business For HST (Before Passing $30K in sales)
Being registered for HST:
- Allows you to recover 100% of the HST you are paying on expenses as a refundable input tax credit (especially powerful if you are spending a lot on startup costs of capital purchases
- Looks more professional, especially if your customers are other businesses (hides the fact that your sales are under $30,000 right now, which is not something you want to advertise)
- Doesn’t usually impact your sales – everyone expects to pay HST when they buy something in Ontario
Bottom Line:
Earning less than $30,000 means you don’t have to charge GST/HST — but you still must report your business income. Talk to a tax professional if you have any questions or need a professional opinion on your exact situation.
Need help filing business income taxes? Need help deciding whether to register for HST early?
Greg Cowan CPA can assist you with tax filing, deductions, and GST/HST decisions:
https://www.gregcowancpa.ca