Rideshare Driver GST Alberta 5% & T2125

Most self-employed Canadians do not have to register for GST until they pass $30,000 in revenue. Rideshare drivers are the big exception. If you drive for Uber or Lyft, the CRA treats you as running a taxi business, and taxi businesses have to register for GST from the very beginning. This guide explains that rule, how it differs from food delivery, and the deductions that lower your tax bill.

Quick Summary

• Rideshare is a taxi business for GST purposes. You must register for a GST/HST account from your first trip. The $30,000 small-supplier threshold does not apply to your rideshare income.
• Alberta has no provincial sales tax, so the rate on your fares is 5% GST.
• Food delivery is different. Pure delivery work (Uber Eats, DoorDash, SkipTheDishes) is not a taxi business, so the regular $30,000 threshold applies to it.
• Key T2125 deductions for drivers: a mileage log, fuel, maintenance, insurance, and the business share of your phone.
• Register early. Uber and Lyft expect you to have a GST/HST number, and you can claim input tax credits on your costs once you do.

Why rideshare drivers register from day one

For most small businesses, the CRA's small-supplier rule means no GST until you pass $30,000 in taxable revenue. Rideshare does not get that grace period.

Since July 1, 2017, the GST/HST definition of a taxi business also covers transporting passengers for fares by motor vehicle within a municipality and its environs when the ride is arranged or coordinated through an electronic platform — a mobile app or a website. That is a description of driving for Uber or Lyft. The older half of the definition still stands too: transporting passengers by taxi for fares regulated under the laws of Canada or a province.

The CRA's rule is direct. Guide RC4022 lists who does not have to register and builds the exception into the definition itself — the exemption is for "a small supplier (that does not carry on a taxi business or provide commercial ride-sharing services)" — then states it outright a page later: a person who carries on a taxi business or provides commercial ride-sharing services must register for the GST/HST even if the person is a small supplier. Info Sheet GI-196 says the same from the driver's side: register, charge, report and remit, regardless of total annual revenues from taxable supplies. There is no $30,000 cushion for this income.

When exactly you have to apply. Your registration takes effect on the day you start making taxable supplies, and you have to apply to the CRA before the thirtieth day after that day. GI-196's own worked example: a driver whose first commercial ride-sharing fare is on September 1 applies for registration by September 30, and the effective date is September 1. So the account is backdated to your first fare either way — applying late does not move the date you started owing GST, it just means you owe it on fares you have already been paid for.

So the framing you see in most "side hustle tax" articles, the one built around staying under $30,000, does not apply to your driving income. Register, get your number, and give it to the platform.

Food delivery is the opposite

This trips people up, because many drivers do both. Pure food delivery (Uber Eats, DoorDash, SkipTheDishes) is not a taxi business. It is a regular self-employment activity, so the standard $30,000 small-supplier threshold applies to your delivery income.

If you only deliver food and earn under $30,000, you are not required to register. If you drive passengers at all, the taxi-business rule applies to that rideshare income and you must register.

If you do both, GI-196 spells out how the two interact, and it is not obvious. Your registration generally applies only to the ride-sharing side unless you ask otherwise — so you are not charging GST on the delivery work, and you cannot claim input tax credits against it either. But once the two together pass $30,000, you stop being a small supplier at all and have to charge tax on everything. The CRA's example is $20,000 of ride-sharing plus $15,000 of other taxable supplies: tax applies to the full $35,000.

What registration means for your fares

Once registered, GST applies to your ride fares. Alberta has no PST, so that is 5% on the fare base. Uber and Lyft provide a year-end tax summary that breaks out the GST on your trips, which you use to complete your GST/HST return. Give your GST/HST number to the platform when you register so your account is set up correctly.

The GST is normally built into the fare rather than added on top. To pull it back out of a GST-included fare, multiply the fare by 5 and divide by 105. You also have to let riders know the tax is being applied, which a receipt showing the GST rate or the tax amount satisfies.

The upside of registering is input tax credits. You can recover the GST you paid on the things you bought to earn those fares. GI-196 names the ones that matter for drivers: gasoline, diesel fuel and propane; vehicle repairs, maintenance and cleaning; and vehicle leases and purchases. Where a purchase is part business and part personal, you split it and claim only the business share. For a driver with heavy vehicle costs, those credits add up.

On filing: the CRA assigns your reporting period when you register, and drivers are generally given an annual one, though you can ask for monthly or quarterly instead. Filing annually with a December 31 year end and business income means the return is due June 15 and the payment is due April 30.

Maximizing your T2125 deductions

At tax time you file a T2125 (Statement of Business or Professional Activities) with your T1 return. The deductions that matter most to a driver:

A mileage log is everything

Your vehicle is your biggest expense, and the CRA will not accept a guess. Record your total kilometres for the year and your business kilometres, so you can prorate vehicle costs by business-use percentage. Without a mileage log, your vehicle claim is at high risk of being denied. Note your odometer at the start and end of the year.

Vehicle running costs

Fuel, oil, maintenance and repairs, tires, insurance, license and registration, and car washes. You deduct the business-use percentage of each, based on your mileage log. If you lease or finance, the lease cost or the interest is also partly deductible.

Phone and data

The business-use share of your phone and data plan, since you need the app to work.

Capital cost allowance on the vehicle

If you own the vehicle, you do not deduct the purchase price all at once. You claim it over time through capital cost allowance, prorated for business use.

A few principles apply to all of these:

• The business-use test. Only the business portion is deductible. Personal driving does not count.
• Keep receipts. A bank statement alone is often not enough for a CRA review.
• Log as you go. Reconstructing a year of trips and expenses in April means missed deductions.

Frequently Asked Questions: Rideshare Driver Taxes in Alberta

Do I have to register for GST as an Uber or Lyft driver in Alberta?

Yes, from the start. Ride-sharing is treated as a taxi business for GST/HST, and taxi businesses must register even if they are small suppliers. The $30,000 threshold does not apply to your rideshare income. Your registration is effective the day of your first fare, and you have to apply before the thirtieth day after it — CRA's own example is a first fare on September 1 and an application by September 30.

What GST rate do I charge in Alberta?

5%. Alberta has no provincial sales tax, so only the federal GST applies to your fares.

Is food delivery treated the same way?

No. Pure food delivery (Uber Eats, DoorDash, SkipTheDishes) is not a taxi business, so the regular $30,000 small-supplier threshold applies to that income. Passenger rideshare is the activity that forces immediate registration.

What can I deduct as a driver?

The business-use share of your vehicle costs (fuel, maintenance, insurance, and more), capital cost allowance on the vehicle, and the business share of your phone. All of it depends on a proper mileage log to establish your business-use percentage.

Can I claim back the GST I pay on gas and repairs?

Yes, once registered. These are input tax credits, and you claim them against the GST you collect on fares. This is one reason registering is not just an obligation but often a benefit for drivers with high vehicle costs.

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Sources: CRA guide RC4022, General Information for GST/HST Registrants (pages 12–13); CRA GST/HST Info Sheet GI-196, GST/HST and Commercial Ride-sharing Services (February 2023). This guide is general information, not tax advice for your situation.