TL:DR Taxes for content creators are complicated, and your time is valuable, let us manage your taxes so you can focus on what you do best. Contact us for a free consultation.
Summary
Content creators are in the business of creating and sharing work through an online platform. They have the same tax obligations as other Canadians, whether self-employed or incorporated. GST/HST can be particularly challenging for content creators due to you typically doing business through another website which collects money on your behalf. Creators must report all their revenue, no matter the source or amount, and can claim expenses that are paid to earn that revenue.
Earning money from other countries sometimes means they withhold taxes from what they pay you. We can work with you to eliminate or reduce that withholding. Recordkeeping is another obligation that you must meet as a content creator. Keep all your receipts and records for at least 7 years in case CRA asks to see them. If you did not report your income as a content creator, you can voluntarily disclose that to CRA under a specific program, but it must be done carefully with the assistance of a professional to ensure you qualify.
Table of Contents
Who are content creators?
Content creators can be anyone from a casual blogger to a professional online model, with the websites being used to generate revenue often overlapping between creators. Websites from which content creators generate revenue include (but are not limited to):
What are my tax obligations as a content creator?
For content creators, Canadian tax obligations can be broken down into two categories: income taxes and sales taxes (GST/HST). Income taxes for content creators can differ depending on whether you are incorporated or self-employed, while sales taxes (GST/HST) will generally not differ between the two.
Incorporated Content Creators
Incorporated content creators have formed a corporation which is a separate legal entity from themselves. This corporation files its own tax return, known as a T2 Corporation Income Tax Return, and has different due dates than an individual does. The corporation will pay tax on its taxable income, or revenue less expenses, like how an individual does. However, corporations are taxed at a different tax rate than individuals. You can learn more about the different tax rates on my tax information page. There are many other differences between a corporation and being self-employed, which goes beyond the scope of this article.
Tip: Deciding when to incorporate is an important conversation, and more complex than you might think. Connect with us for a free consultation to see if incorporating is right for you.
Self-Employed Content Creators
Self-employed content creators are operating under their own name, or a business name if they chose to register one. Self-employment income is reported on your T1 Income Tax and Benefit Return on schedule T2125. This schedule breaks down your revenue and expenses, leaving your net income from content creation to be taxed based on your personal tax brackets. For more information on personal tax brackets, check out our tax information page.
GST/HST Obligations for Content Creators
Whether you are self-employed or incorporated, you may have an obligation to collect and remit GST/HST from your customers. Generally, corporations and self-employed individuals who earn revenue of more than $30,000 in four consecutive quarters must register for a GST/HST number, charge GST/HST to customers in Canada, and remit those taxes to CRA. It is important to remember that GST/HST obligations differ by province, so depending on where you live you may collect and remit HST, GST and PST, or only GST. When in doubt, reach out to a professional to ensure you are meeting your GST/HST obligations.
The unique aspect to this obligation with content creation is that you often do not collect revenue directly from clients, often time revenue is received from the website you create content on. As part of this, websites often collect GST/HST on your behalf and remit it to CRA. This does not eliminate your obligation, in fact, it complicates the GST/HST return that needs to be filed and increases the chances of errors. Therefore, it is essential to collaborate with a professional who is familiar with GST/HST for content creators to ensure your return is prepared accurately and on time.
What revenue do content creators need to report?
Revenue, or earnings, for content creators comes from a variety of sources. No matter what source the revenue comes from, or where it comes from, it must be claimed and reported to Canada Revenue Agency (CRA) on your taxes. The way in which your content creation revenue is reported depends on whether you are incorporated or not, this is discussed earlier in this article. There are many different streams of revenue for content creators, these can include (but is not limited to):
- Advertisements for other businesses
- Brand deals, partnerships, and sponsorships
- Collaborations with other creators
- Digital product sales such as pictures and videos
- Donations and tips from subscribers or followers
- Gifts from subscribers or followers
- Physical goods and merchandise sold to subscribers or followers
- Subscriptions to content or private pages
- Trips or merchandise from businesses
What expenses can content creators claim?
As a content creator, you incur many different expenses to create content for your fans and followers. Before we get into what expenses you can claim, it is important to break down what can be a current expense and what gets claimed over time, also known as a capital expense.
Current expenses are expenses that you pay for which do not offer a lasting benefit. The CRA allows you to claim these amounts in the year in which you pay for them to reduce your income, whether in a corporation or self-employed, if they are for the purpose of producing income. You can never claim personal expenses against your income. Current expenses for content creators include (but are not limited to):
- Advertising and promotion
- Beauty (if relating to your content creation and not personal in nature)
- Costumes and props
- Health and wellness (such as gym memberships for fitness influencers)
- Home office expenses (insurance, mortgage interest or rent, utilities, maintenance, etc.)
- Management and administration (social media managers, agencies, etc.)
- Meals and entertainment
- Phone and internet.
- Professional services (lawyer, accountant, etc.)
- Staff payroll and subcontractors (editors, photographers, graphic designers, etc.)
- Travel
- Vehicle expenses (gas, insurance, maintenance, etc.)
Capital expenses are items that are not used up and generally last more than a year. Whether something is capital and claimed over a number of years also depends on the value. For example, items under $500 often do not make sense to capitalize and can be expensed in the same year you purchase them. With capital expenses, it must also be directly related to your content creation to be claimed. Capital expenses for content creators include (but are not limited to):
- Automobiles (car, SUV, trucks, etc.)
- Cameras and lighting equipment
- Computers and software
- Furniture and fixtures
- General equipment
- Gym equipment
Foreign Withholding Taxes for Content Creators
As a content creator, you might notice that you do not receive all the revenue that you earn. This can be for several reasons, such as the platform taking a cut of your earnings as their fee, such as the 20% that Onlyfans charges, or sometimes withholding taxes from other countries.
Most commonly, content creators who earn income from US based websites like Facebook (Meta) and YouTube, are sometimes subject to withholding taxes on their earnings. Withholding taxes are taxes that the payer must withhold from you to meet their obligations to their tax authority, such as the IRS in the US. However, if certain conditions are met, you may not need to pay these withholding taxes, and you could eliminate them.
If you are having taxes withheld from your earnings from content creation, such as by a company based in the US, contact us to see how we can help recover or eliminate those amounts.
Recordkeeping Obligations for Content Creators
Like other taxpayers, content creators, whether self-employed or incorporated, must keep adequate books and records. This means keeping receipts, invoices, accounting records, and other documents to support your tax filing. These records need to be kept for at least 6 years from the end of the year to which they relate. For capital assets, you need to keep receipts for at least 6 years from the year you dispose of the asset or 6 years from the last year from which a calculation relating to the asset is included on your tax return.
Tip: Keep copies of your records in a digital format, such as PDF documents, in an online environment, such as Google Drive or Dropbox. If using a bookkeeping program such as QuickBooks, you can also attach receipts to every transaction which helps with recordkeeping.
Pro Tip: Separate your personal and business expenses by using a separate business account and credit card. This will make filing your taxes easier and can save you on accounting fees and headaches.
What if I didn’t report my income from content creation?
Undisclosed income from content creation, or other sources, is a serious matter that needs to be addressed quickly to achieve the best result possible. CRA does offer taxpayers relief, if they are eligible, from penalties and some interest under the Voluntary Disclosures Program (VDP). The program allows taxpayers the opportunity to rectify incorrect or incomplete information and/or disclose information to the CRA that was previously unreported. There are several requirements of the VDP, all of which must be met to qualify for relief from penalties and interest.
Tip: The sooner you disclose your income to CRA and pay outstanding amounts, the less interest you will end up paying on top of your taxes.
We can work with you to rectify the issue of unreported income from content creation through the VDP and work towards reducing interest and penalties on that income. It is important to contact us quickly to get started on the disclosure, before CRA asks for information and the disclosure is no longer voluntary.
How We Can Help
We have years of experience dealing with CRA and preparing income tax returns and GST/HST returns. Whether you are self-employed or incorporated, registered for GST/HST, or not registered, or have undisclosed income, we are confident that we can assist you with your taxes and relieve stress. Allow us to work on your accounting and tax matters so you can focus on what you do best – content creation.
Frequently Asked Questions
Does it matter what kind of content I create?
It absolutely doesn’t matter what kind of content you create, whether you’re running a Twitch channel that streams Fortnight or an adult focused Onlyfans page, what you create is between you and your viewers and subscribers. We’re here to assist you with your accounting and tax needs, not to judge you for the content you create.
Is there a minimum amount of income before I report it?
In Canada, you are required to report all of your income and expenses on your tax return, regardless of whether you are self-employed or incorporated. On personal tax returns, there is a basic exemption, known as the basic personal amount, that Canadian resident taxpayers are entitled to which can eliminate income tax below a certain amount. For 2024, this amount is $15,705. There is no such exemption for corporations.
Even if you have income below the basic personal amount, it is still beneficial to file a personal tax return as a content creator because you may be eligible for certain tax credits and get money back. The income you report also generates registered retirement savings plan (RRSP) contribution room, which you can make use of in future years.
What if I get paid from a company outside of Canada?
The source of your income does not change whether it is subject to income taxes. If you are paid by a company from the United Kingdom, the United States of America, or another country, you are still required to report the income you receive.
It is important to note that you must report the gross income you receive, not only the net amount if the company takes a cut of your earnings. For example, Onlyfans is based in the United Kingdom and takes a 20% cut on payments it makes to content creators. You may think you should report only the amount you received from Onlyfans. However, you should report the full amount, before the 20% cut, and then report the 20% taken by Onlyfans as an expense.
How much should I put aside for my taxes?
The amount you should set aside for your taxes as a content creator largely depends on your income. As a general rule of thumb, it’s a good idea to set aside at least 1/3 or 33% of your gross income for taxes each year. This is an oversimplification but a good starting point to avoid sticker shock when you go to file your taxes.
For a more accurate idea of how much money you should put aside for your taxes, consult with a tax professional. We can develop a forecast of your income and expenses and help you determine a more accurate amount to put aside for when you file your taxes. We can also assist with preparing an instalment schedule for when you are required to pay taxes throughout the year.