SkipTheDishes reporting guide | 2021
How to report your income
For income tax purposes, couriers on the Skip network
are treated as independent contractors. This means that
SkipTheDishes are not required to withhold payroll deductions
from your earnings and do not issue you a T4 slip at the
end of the year. However, your delivery fees are still taxable
and must be reported on Form T2125
Statement of Business
or Professional Activities
. This is included with your other
income on your tax return.
Your tips are also taxable. If the customer adds tips to their
credit card or debit card payments, it will be included on the
statement of earnings you receive from SkipTheDishes so you
will know how much to report. However, you should be keeping
a record of any tips you receive on cash payments.
What kind of expenses can you claim?
As a courier on the Skip network, your primary expense will
be the operating costs of your vehicle. These include gas,
insurance, license, registration and maintenance. It also
includes interest if you have a car loan. However, you probably
also use your car for personal use. If so, you can only claim
that portion of your expenses relating to your business. This
is calculated based on mileage. For example, if you drove
10,000 kilometres in the year and 7,000 kilometres were driven
on the Skip network, you would claim 70% of your expenses.
For this reason, you must keep a logbook of your business use. You must record your beginning and ending
odometer readings for the year so that you know your total mileage. If you only started driving during the year,
your odometer reading would be from that date.
The cost of repairs resulting from accidents incurred while you are using your car on business are fully
deductible, as are parking costs. By the same token, repairs from an accident while you were using your car for
personal purposes are not deductible at all. Fines and traic tickets are also not deductible.
Cost of vehicle
The cost of the vehicle itself cannot be claimed as an expense. Instead you claim a percentage of the cost each
year. This is called capital cost allowance (CCA). For passenger vehicles there is a ceiling of $30,000 plus GST/
HST and provincial sales tax which can be used for determining CCA. The rate is 30%. Again, if you had personal
use of your vehicle, you could only claim the portion of your CCA relating to business use.
In the year you purchase a vehicle, you used to be limited to 50% of your normal CCA claim. However, for
vehicles purchased after November 21, 2018, you can now claim 150%. Unfortunately, in the year you start your
business, your claim must be prorated based on the number of days in the year your business operated.
If your car is a zero-emission vehicle (which includes plug-in hybrids), and you acquired it on or after March 19,
2019, a special rule allows you to write it o in full in the year you purchase it. However, this only applies if you
did not get a rebate under the federal purchase incentive program.
Cell phones
Couriers on the Skip network are required to have a cell phone to communicate with their restaurants and
customers. You may therefore claim a percentage of the airtime expense that reasonably relates to earning
business income. If your plan does not break down the costs for airtime and data usage, we suggest using
a percentage of your monthly bill based on the amount of time you used it for business-related calls.
Other expenses
Other expenses you are likely to incur as a courier include:
• The thermal bags you use for transporting meals
• The cost of a background check you must pay for when applying
• Tax return preparation (for the cost of preparing your previous year’s return)
You cannot claim expenses you incur for your own personal use. This would include clothing and snacks you
might buy when you are working.
Records
It is important to keep a proper record of your income and expenses and substantiate your expenses with
receipts. Receipts must include a description of the goods or services purchased, so if you are illing
up at a gas station, you need more than just the ATM transaction slip or credit card slip. This is the case even
if the slip shows the name of the gas station (since you could be purchasing items other than gas, such as snacks
or cigarettes).
Canada Workers Beneit
Your net earnings from SkipTheDishes qualiies as working income for the purpose of the Canada Workers
Beneit. This is a refundable tax credit designed to supplement the earnings of low-income workers. If you are
single and your working income is more than $3,000, you may be entitled to this credit if your income from all
sources is less than approximately $24,000. If you married or living common-law, you may get something if your
joint income is less than around $36,000.
You will not be able to claim this credit if you were a full-time student for more than three months.
SkipTheDishes reporting guide | 2021
GST/HST
Since SkipTheDishes is the entity that contracts with
the customer to deliver the food, it is responsible for
charging and collecting GST/HST. The delivery service
that the driver provides is zero-rated. This means that
although you are not required to charge or collect
GST/HST yourself, you can still register and ile a GST/
HST return. This would be to your advantage since
you would then be able to claim input tax credits for
the GST/HST you were charged on your expenses.
SkipTheDishes reporting guide | 2021
Income tax instalment payments
When you are an employee, income tax is withheld at source from your wages. However, this is not the case with
independent contractors. You may therefore end up having a balance owing when you ile your tax return. In this
case, the CRA may require you to pay quarterly instalments for future years. However, this would only happen
if your net tax owing is more than $3,000 ($1,800 for Quebec residents).
The CRA will advise you if they want to you to start paying instalments. If this is your irst year, your irst payment
will be due in September.
Are you a new Canadian?
If you arrived in Canada in 2020, you must determine your residency status for income tax purposes. This will
depend on the extent of your residential ties here. If you have moved here permanently you will have most likely
established signiicant residential ties and will be considered a resident for tax purposes. However, if you are
in Canada on a temporary basis only and do not have a home here, you are probably a non-resident. If you are
in doubt, you can request a determination from the CTA using Form NR74
Determination of Residency Status
(entering Canada).
Assuming you are a resident, the following rules will apply:
• You will ile your tax return for 2020 as a part-year resident of Canada. You will be asked to enter the date you
became a resident. This will usually be the date you arrived here.
• Any income you earned before becoming a resident is not included on your return unless it was Canadian-
source. All income you earned subsequently must be reported on your return, regardless of where it was
earned. This is called your “world income.”
• Most of your personal amounts will be prorated based on the number of days in the year you were
resident. For example, the basic personal amount for 2020 is $13,229. However, if you became resident on
December 1, 2020, you would only be able to claim $1,120, calculated as $13,229 x 31/365. However, this rule
does not apply to personal amounts based on how much you paid such as tuition fees and CPP contributions.
You can claim these amounts in full.
• If you sold any capital properties (such as shares or mutual funds) after arriving in Canada, you are only
taxable on the capital gain accrued since you became resident. It is therefore a good idea to establish the
value of any such properties on the date you became resident.
• Although the primary reason for iling a tax return is to determine how much tax you owe or are getting
refunded, it is also a requirement for receiving beneits such as the GST/HST Credit or the Canada Child
Beneit (if you have children). Some provinces also provide a credit based on the rent you pay. Even if you
do not owe any taxes and have nothing coming back, you would therefore still want to ile a tax return for this
reason. In the year you become a resident, you will also need to ile Form RC151 GST/HST
Credit Application
for Individuals who Become Residents of Canada.
If you are a non-resident, you will be taxable only on your Canadian-source employment or business income
(which includes your income from SkipTheDishes). However, unless this represents 90% or more of your world
income, you would not be entitled to claim most personal amounts. An exception would be amounts you can
claim for tuition fees.
