Invoicing & Getting Paid With A Side Hustle

Tags: #Business Planning #New Business Owners #Side Hustle #Taxes

Your side hustle is really starting to take shape. Congratulations! Now, it’s time to start turning your hard work into earnings. Getting paid is one of the most exciting parts of a side hustle, but it can also feel like a lot of paperwork and little direction. Not to worry, here we’ll make the complicated straightforward by understanding GST/HST and your sole proprietorship obligations.

Why Start a Side Hustle in Canada? (Side Hustle Series)

Professional woman working on invoices at desk with calculator and computer, managing side hustle payments and bookkeeping

How to Register a Business While Working Full-Time (Side Hustle Series)

Choosing the Right Business Structure for Your Side Hustle (Side Hustle Series)

Tax Basics for Side Hustlers in Canada (Side Hustle Series)

Setting Up to Get Paid as a Side Hustler

When planning to operate your side hustle as a business, you’ll need to choose one of the following business structures to begin invoicing clients professionally. (We covered this in a previous blog, too)

Sole Proprietorship: Single owner who invoices clients in their own name or registered business name.
General Partnership: Two or more owners invoicing clients under the partnership name as a business entity.

After that, setting up invoicing is low-cost to start, easy to manage, and means you can report business income on your personal taxes. It also sets you up properly for things like getting a GST/HST number when your revenues grow.

However, it’s important to note that you’re responsible for the business’s debts or liabilities, and it can be harder to get financing compared to an incorporated company.

Invoicing Basics for Sole Proprietorship

A well-structured invoice demonstrates your professionalism to clients. Invoices should include:

Business name
Contact information
Client details
Invoice number
Description of work/product
Amount owed and due date
Payment methods
GST/HST number (if you’re registered, it must appear when charging tax)

Invoices act as a source of income, which is crucial in protecting you if there’s ever a dispute between a client and for filing taxes. A consistent invoice format helps build your brand and appear reliable.

We recommend that Sole Proprietors open a separate bank account for their business rather than using their personal one. This ensures accurate record-keeping to locate any invoices and payments, making tax season far less stressful.

Man with laptop and papers reviewing HST Tax Account registration

GST/HST: Do You Need to Register?

Once your business starts to make over $30,000 in a calendar quarter, your side hustle is no longer deemed a small “supplier”, and you will now have to register it for GST/HST. Even if your business makes under $30,000, registration is optional, yet remains beneficial.

Getting a GST/HST Number and Using the HST Registry

Once your business has been incorporated, you can look to registering it and setting up a tax account for it. At Ontario Business Central, we assist with registration for tax accounts to set up your payroll. The setup totals approximately; $54.99 + $7.15 (HST) = $62.14.

If you already have an existing tax account, we can help you find it through our Business Information (BN) Search and email the number back to you on the same day. This costs approximately; $43.99 + $5.72 (HST) = $49.71

Best Practices for Getting Paid

Keep sales and expense records for around six to seven years for safety and financial management purposes.
Include clear payment terms on invoices (30 days).
Offer multiple payment options, such as e-transfer, PayPal, and cheque.
Always issue receipts with GST/HST details when applicable.

Register Your Business, Secure Your Future

Getting your invoicing and GST/HST setup right makes it easier to get paid and stay on top of your business. With Ontario Business Central, you don’t have to worry about the details. We’re here to help with registering your Sole Proprietorship, setting up your GST/HST number, and keeping your side hustle moving forward. That way, you can focus on growing your passion into profit.

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.