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How Does Income Tax Work For Social Media Influencers? Here's What To Know

Influencers and taxes. How does it work?

Associate Editor
Canadian income tax form (left), social media influencer filming herself in front of camera (right)

Canadian income tax form (left), social media influencer filming herself in front of camera (right)

When it comes to tax season in Canada, things can totally get confusing. Luckily, the Canada Revenue Agency is making things easier with some guidance — especially if you're a social media influencer. Considering many people make income through countless online platforms, just how does it work when it comes time to file your income taxes?

The CRA states that "influencers who generate monetary and non-monetary income through social media may be carrying on business activities and earning business income," so reporting any earnings is a must.

Influencers can earn income by posting pictures, videos or content on their social media channels with product placement or product promotion, the CRA says.

The agency states that there are various ways, both monetary and non-monetary, for influencers to earn income from social media activities. These include:

  • Subscriptions to their channel(s)
  • Advertising (clickbait and brand advertisements)
  • Sponsorships
  • Calls to action
  • Merchandise sales or commission on sales
  • Tips
  • Perks such as products, clothes, trips or other gifts
  • Referral codes
The CRA considers social media activity to be business-related when there is an element of profit involved. In this case, reporting your income is required, and when it comes to non-monetary income, you must "use the fair market value of the item received."

Social media influencers in Canada whose total "taxable supplies" is more than $30,000 over four calendar quarters will be required to register for, collect, and pay GST/HST on all taxable income from their online activities, the CRA says.

If your social media activities are considered business income, the CRA says that you may be able to deduct eligible business expenses to reduce your amount of tax owed.

The expenses must be related directly to your business activities as a social media influencer, must be reasonable and not personal in nature, and you should be able to substantiate them, the CRA states.

With platforms such as TikTok and Instagram becoming ways to generate income for many, the Canada Revenue Agency says that it's important to report sales and social media activity income to the CRA to avoid any penalties, including having to pay additional interest on the unreported income.

This article’s cover image was used for illustrative purposes only.

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