Multiple Side Hustles in Canada: Do You Need More Than One T2125?

One Tax Return Can Include Several T2125 Forms

A designer sells templates, drives for a delivery app, and takes freelance branding projects. Is that one business or three—and how many T2125 forms belong on the tax return?

The CRA's rule is clear: complete a separate Form T2125 for each business or professional activity. You still file one personal T1 return, but it can contain multiple T2125 forms. This is an under-covered issue for Canadians building income from several side hustles.

Multiple Clients Do Not Automatically Mean Multiple Businesses

The number of clients or payment platforms does not decide the answer. If you provide the same kind of service to several clients, that is normally one business activity.

For example, a freelance writer may receive money from:

Those revenue streams can generally belong on one writing-business T2125. Add the gross revenue from every source and claim the related writing expenses on that form. A T4A, PayPal deposit, or foreign client does not create a new business by itself.

When Separate T2125 Forms Make Sense

Separate forms are required when you carry on genuinely different activities. Examples might include:

Each activity may have a different business name, industry code, revenue, and expense pattern. Keeping them separate gives the CRA an accurate result for each operation instead of blending unrelated numbers.

A second brand name alone is not conclusive. If two brands sell essentially the same service using the same tools and clients, they may be one activity. If you are unsure whether closely related work is one business or several, ask a tax professional to review the facts.

How to Divide Shared Expenses

Several businesses may use the same phone, home office, software, or vehicle. Do not deduct the full cost on every T2125. Allocate the business portion using a reasonable method, then divide it among the activities.

For example, suppose the deductible business portion of your annual internet bill is $720. Based on actual work time, you use it 75% for consulting and 25% for your online shop:

Useful allocation methods include hours worked, kilometres driven, transaction counts, or another measure that reflects actual use. Write down the method and apply it consistently. For home-office expenses, keep the workspace calculation and respect the special rule that those costs cannot create or increase a business loss.

Keep Income and Records Separate From Day One

You do not necessarily need a different bank account for every small activity, but your records should show which business earned or incurred each amount. Track:

This also prevents an easy mistake: reporting only net platform deposits instead of gross revenue and separate fees.

One GST/HST Threshold, Not One Per Side Hustle

Separate T2125 forms do not give one $30,000 small-supplier threshold to each activity. For an individual sole proprietor, taxable supplies from the person's commercial activities are generally considered together when determining whether GST/HST registration is required. Do not split revenue between side hustles to stay below the threshold.

Organize Every Activity With ClaimHero

ClaimHero is a free Canadian T2125 expense tracker for sole proprietors. Record each cost under the correct CRA category, identify the business activity in your notes, and export organized totals at year-end. Clean separation makes multiple T2125 forms much easier to prepare—and helps ensure a shared expense is claimed once, not twice.