- Self-employment income: All platform earnings go on Form T2125. Platforms issue T4A slips, not T4s.
- HST threshold: Register when revenues exceed $30,000 (not mandatory from day one like ride-share).
- Vehicle deductions: Car or bicycle expenses deductible based on business-use percentage — mileage logbook required for cars.
- Equipment bags: Insulated delivery bags, phone mounts, and work-related gear are fully deductible.
- CPP both sides: Self-employed couriers pay both employee and employer CPP portions; the employer half is deductible from income.
- Instalments: If net tax owing exceeds $3,000, expect quarterly instalment notices from CRA.
Are You Really Self-Employed?
All major Canadian food delivery platforms — DoorDash, Instacart, Skip the Dishes, Uber Eats, Cornershop — classify couriers as independent contractors, not employees. CRA generally agrees with this classification for most couriers, meaning:
- No CPP or EI is withheld from your earnings by the platform
- No T4 slip is issued — you receive a T4A showing gross payments
- You are responsible for reporting your income and paying all taxes yourself
- You can deduct business expenses that employees cannot
Platforms only issue T4A slips when they pay you $500 or more during the year. If you earned under $500 from a platform, you may not receive a T4A — but you are still legally required to report the income on your T1 return. CRA cross-references platform data; failing to report gig income is one of their most active audit areas.
Reporting Income: Form T2125
Report all delivery earnings on Form T2125 (Statement of Business or Professional Activities). If you work for multiple platforms, you can consolidate them on a single T2125 or file separate forms for each — either approach is acceptable.
| T2125 Section | What Goes Here |
|---|---|
| Business name | Your name or sole proprietorship name (e.g., "John Smith Delivery Services") |
| Industry code | NAICS 492110 (couriers and messengers) |
| Gross income | Total from all T4As plus any cash tips not on the T4A |
| Business expenses | Vehicle, equipment, cell phone, platform fees, insurance |
| Net income | Gross income minus total expenses; flows to Line 13500 of T1 |
Vehicle Expenses: Your Largest Deduction
Car or truck deliveries
All vehicle expenses are deductible in proportion to your business-use percentage:
Business-use % = Delivery kilometres ÷ Total kilometres driven in the year
| Vehicle Expense | Business Portion Deductible? |
|---|---|
| Fuel | Yes — biggest single deduction for most couriers |
| Insurance | Yes — confirm commercial coverage with your insurer |
| Repairs and maintenance | Yes — oil changes, tires, brakes |
| Car washes | Yes — especially if appearance matters for deliveries |
| Licence and registration | Yes — annual fees prorated by business use |
| Parking fees (during deliveries) | Yes — keep receipts |
| CCA (Capital Cost Allowance) | Yes — 30% declining balance on vehicle cost (Class 10/10.1) |
| Lease payments | Yes — business-use portion, subject to luxury vehicle cap |
Most personal auto insurance policies explicitly exclude coverage while you are being compensated to deliver goods. If you are in an accident while on a delivery and your insurer discovers you were working for a platform, they may deny your claim entirely. Check with your insurer about adding a commercial rider or switching to a commercial policy — the added premium is tax-deductible.
Bicycle or e-bike deliveries
Cyclists can deduct a business-use proportion of bicycle costs and related expenses:
| Bicycle Expense | Deductibility | CCA Class |
|---|---|---|
| Bicycle purchase price | Business-use % via CCA | Class 8 (20% declining balance) |
| E-bike battery / motor | Business-use % via CCA | Class 8 |
| Repairs and maintenance | Business-use % as current expense | Not CCA |
| Locks, lights, safety gear | Fully deductible (100% business) | Not CCA (low cost items) |
| Insulated delivery bags | Fully deductible | Not CCA |
Mileage logbook — mandatory for car couriers
CRA requires written records to support vehicle expense claims. For each delivery shift, record:
- Date
- Starting odometer reading
- Ending odometer reading
- Purpose (e.g., "DoorDash deliveries — downtown Toronto")
- Total km for the shift
Most delivery platforms show your total delivery kilometres in your year-end summary — this is a useful starting point, but CRA prefers a logbook that also records your total annual kilometres to calculate the business-use percentage.
Other Deductible Business Expenses
| Expense | Deductible? | Notes |
|---|---|---|
| Cell phone plan (business portion) | Yes | Estimate business-use %; keep records. ~60–80% common for active couriers |
| Smartphone (business portion) | Yes via CCA | Class 8 (20% per year), business-use % only |
| Phone mount for car/bike | Yes | Fully deductible as small equipment |
| Insulated delivery bags | Yes | Required for food safety; fully deductible |
| Thermal clothing (courier-specific) | Partially | Only if it is a uniform or work-specific protective gear, not general clothing |
| Platform service fees | Yes | Deduct fees or commissions charged by the platform |
| Parking fines | No | Traffic fines are never deductible |
| Accounting / tax prep fees | Yes | Cost of preparing your business tax forms |
HST/GST Registration
Food delivery is subject to the standard $30,000 small supplier threshold — unlike ride-share, you are not required to register from your very first delivery. Once you cross $30,000 in revenues (all business activities combined), registration is mandatory within 30 days.
Registering for HST before hitting the threshold means you can immediately claim ITCs on fuel, equipment, and phone costs. However, you must also start charging HST on your services — which may complicate your situation since the platforms handle their own HST remittance. Get advice from a tax professional on whether early voluntary registration makes sense for your situation.
CPP Contributions for Delivery Couriers
As a self-employed courier, you pay CPP on your net business income (gross revenue minus all business expenses). The self-employed contribution rate is double the employee rate because you pay both sides:
| Your Net Delivery Income | Approximate CPP Owing (2025) | Employer Half (Deductible) |
|---|---|---|
| $20,000 | ~$1,133 | ~$566 |
| $35,000 | ~$2,070 | ~$1,035 |
| $50,000 | ~$2,985 | ~$1,492 |
| $73,200+ (max) | $8,068 | $4,034 |
The employer half of CPP is deductible from your income on Line 22200 of your T1 return. The employee half generates a non-refundable tax credit worth 15% federally.
What If I Also Have an Employed Job?
Many delivery couriers also work a regular employed job. Your T4 employment income and T4A gig income are both reported on the same T1 return. Here's what changes:
- CPP may be withheld at your employed job — but you also owe CPP on your net self-employment income, up to the annual maximum. If your combined CPP contributions exceed the maximum ($4,034.10 employee + $4,034.10 employer self-employed), you have an overpayment that is refunded.
- Your employer job may withhold EI premiums. Self-employed couriers do not contribute to EI (unless they opt in for access to EI sickness/parental benefits).
- Adding delivery income on top of employment income will likely increase your marginal tax rate and may result in a balance owing — set aside 25–35% of each delivery paycheque for taxes.
Tax Planning Tips for Delivery Couriers
| Strategy | Benefit |
|---|---|
| Open a dedicated bank account for delivery income | Makes tracking revenue and expenses much simpler; looks professional to CRA |
| Set aside 25–35% of gross earnings for tax | Avoids a shocking balance owing in April |
| Track every kilometre with an app (Stride, MileIQ) | Maximizes vehicle deductions; creates an audit-ready logbook |
| Keep all receipts for fuel, maintenance, bags | Ensures you can substantiate all expense claims on audit |
| Contribute to RRSP | Reduces net income; lowers tax and CPP contributions |
| Claim the employer CPP deduction (Line 22200) | Often missed; reduces taxable income by up to $4,034 |