Mandatory HST from dollar one, T4A income reporting, vehicle deductions, and a rideshare tax calculator
Driving for Uber or Lyft in Canada comes with a unique and often misunderstood tax obligation: unlike virtually every other self-employed person, rideshare drivers must register for GST/HST from their very first dollar of income — there is no $30,000 small supplier threshold exemption. This single rule changes the entire tax picture for Canadian rideshare drivers and must be addressed before you accept your first ride.
Under the Excise Tax Act, "taxi businesses" — which the CRA has explicitly confirmed includes Uber, Lyft, and all ride-for-hire services — are excluded from the $30,000 small supplier threshold. The rationale was originally to ensure traditional taxi drivers and ride-hailing drivers operated on the same tax footing. The result: every Uber and Lyft driver in Canada is a mandatory GST/HST registrant from their first fare.
You must register for a GST/HST account (RT number) through the CRA before driving, charge HST on your fares, and remit the net amount (collected minus ITCs) to the CRA on your filing schedule.
Uber collects the fare from passengers and remits a portion to drivers. The key question is whether Uber collects HST on your behalf or whether you must collect it separately. Under current CRA rules and Uber's structure in Canada, Uber is the "electronic distribution platform" and collects and remits HST on passenger fares on behalf of drivers in most provinces. However, you still need your own GST/HST registration number and must report and account for HST on your T1 return through your HST return — even if Uber is remitting on your behalf. The ITCs you claim on vehicle and operating expenses flow through your own HST account.
Uber issues Canadian drivers a T4A slip (Statement of Pension, Retirement, Annuity, and Other Income) showing your gross earnings for the year. This amount flows to T2125 Line 13500 as gross business income. Do NOT use the net amount (after Uber's service fee) as your gross income — always report the gross amount shown on your T4A, then deduct the service fee as a business expense on T2125.
| Expense | Deductibility | Notes |
|---|---|---|
| Uber/Lyft service fee | 100% | Platform commission is fully deductible |
| Fuel | Business % (logbook) | Keep all fuel receipts or use bank statements |
| Vehicle insurance | Business % | May need rideshare endorsement — that extra premium portion may be 100% deductible |
| Vehicle maintenance and repairs | Business % | Oil changes, tires, brakes — all business % deductible |
| Car wash | Business % | Keep receipts |
| Phone and data plan | Business % | Essential for the app — high business % justified |
| Phone mount/accessories | 100% | Required for the job — fully deductible |
| Water and snacks for passengers | 50% | Treated as meal/entertainment — 50% rule applies |
| Vehicle CCA | Business % | Class 10 (≤$36K) or 10.1 (>$36K) at 30% declining balance |
| Parking (while waiting for rides) | 100% | Not subject to 50% rule — not entertainment |
| Tolls (business trips) | 100% | Keep records |
As a small rideshare operator under $1.5M, you file HST annually (due 3 months after your December 31 fiscal year end = March 31). Your HST return reports total HST collected on fares minus ITCs on vehicle and operating expenses. Many rideshare drivers receive a small HST refund due to significant ITC claims on vehicle expenses — especially in high-HST provinces like Ontario (13%) and Atlantic Canada (15%).
KOHO's business account lets rideshare drivers automatically save a percentage of every deposit for HST and income tax — so the annual remittance never comes as a shock.