As social media platforms continue to grow in popularity, many individuals are turning to content creation as a primary or supplementary source of income. Whether you earn money through OnlyFans, YouTube, TikTok, Twitch, or other platforms, it is important to understand your tax obligations. In Canada, income earned from social media activities is considered taxable and must be reported to the Canada Revenue Agency (CRA).
Understanding the social media influencer economy
A social media influencer is someone who has built a following on platforms such as Facebook, Instagram, TikTok, Twitch, YouTube, or OnlyFans. These individuals often generate revenue through various means, including:
- Subscriptions and memberships
- Advertising revenue
- Sponsorships and brand partnerships
- Affiliate marketing and referral programs
- Tips and donations from followers
- Gifts and promotional items
- Paid collaborations with businesses
Regardless of how the income is earned, the CRA requires all social media influencers to report their earnings and pay taxes accordingly.
Income tax obligations for content creators
If you earn money through content creation, your earnings are considered self-employment income. This means you must report your earnings on your annual income tax return. Here’s what you need to know:
Reporting your income
All income earned from social media activities, whether monetary or non-monetary, must be reported. Influencers residing in Canada must declare:
- Income from Canadian and international sources
- Earnings from digital platforms such as OnlyFans, YouTube, TikTok, and Twitch
- Payments received in the form of goods or services (such as free trips or products)
For tax reporting, you must:
- Report your taxable income on line 26000 of your income tax and benefit return.
- Complete Form T2125 (Statement of Business or Professional Activities) if you are self-employed.
- If your business is incorporated, file a T2 corporate income tax return along with Schedule 125 (Income Statement Information).
What if you are not a resident of Canada?
If you are a non-resident earning money from Canadian sources, you may still be subject to Canadian income tax. The tax treatment of your earnings will depend on whether Canada has a tax treaty with your country.
Can you deduct business expenses?
Yes. If you qualify as a business, you can deduct reasonable expenses related to earning your income. Eligible business expenses may include:
- Equipment costs (cameras, microphones, lighting)
- Internet and phone bills (if used for business purposes)
- Software and editing tools
- Marketing and advertising expenses
- Home office expenses
- Travel costs for work-related trips
To claim deductions, you must keep detailed records of all expenses and provide proof of payment.
Do you need to pay GST/HST?
When Do You Need to Register for GST/HST?
If your total revenue exceeds $30,000 over four consecutive calendar quarters, you are required to register for, collect, and remit Goods and Services Tax/Harmonized Sales Tax (GST/HST) to the CRA.
Once registered, you must:
- Charge GST/HST on taxable services and products
- File GST/HST returns
- Remit the collected tax to the CRA
Can you claim input tax credits (ITCs)?
If you are a GST/HST registrant, you may be eligible to claim Input Tax Credits (ITCs) for GST/HST paid on business expenses. This allows you to recover a portion of the taxes paid on goods and services used for business activities.
Keeping records: Why it matters
Accurate record-keeping is essential for tax compliance. As a content creator, you should maintain detailed records of:
- Income received from all platforms
- Business-related expenses
- GST/HST collected and paid
- Contracts and agreements with brands and sponsors
Keeping organized records will help ensure you file accurate tax returns and avoid potential audits or penalties from the CRA.
