It’s official, you’re your own boss. This is where it starts to get real, because with great power comes HST. You know HST (Harmonized Sales Tax) and you’ve been seeing it since 2010 at the end of receipts for most goods and services. Now that you’re in charge, you’re responsible for collecting HST for the CRA, the Canada Revenue Agency, and for filing HST returns.
Luckily HST is already calculated in the fares your passengers pay, so it won’t impact your earnings. Also, when you register for HST, you can claim some of it back when you file your taxes.
If you’ve had experience running a business in Ontario, this probably sounds familiar, and you may already have an HST registration number. However, if this is your first time earning on your terms, read on and we’ll talk you through how this impacts you and what you need to do.
- HST benefits for Lyft drivers
- Your Driver Dashboard Ride earnings statement
- CRA requirements for drivers
- Frequently asked questions
When you register for HST, you should be eligible to claim input tax credits on some expenses incurred as a Lyft driver. Claiming input tax credits means asking the CRA to refund you for the HST you’ve paid on eligible goods and services during the tax year.
So when you pay HST on some things you would’ve normally paid for as a car owner anyway — like gas, car repairs, and car washes — you may be able to claim some HST back in the form of a tax credit. Of course, some restrictions do apply.
Pro tip: A tax professional can help you understand which things are eligible for input tax credits and what documentation you need to support an input tax credit claim.
You’ll see the following sections on your Lyft ride earnings statement.
Ride Earnings: This is how much you earn from the Lyft rides you give. This is based on the time and distance of each ride.
Tips: This is 100% of all the tips you earn and you get to keep it all.
HST Collected: This is the amount you need to save for the CRA. Passengers pay this HST for the service you provide them.
HST on Lyft Fees: You pay this HST for the service Lyft provides you, i.e. Lyft fees*. Lyft fees reflect the commission Lyft takes from total ride earnings to continue to provide a great platform and keep the community growing. The HST is calculated on the Lyft fees and other charges you pay to Lyft. When you’re registered for HST, you can claim this amount as an input tax credit.
*Lyft’s fees for Premier rides is different.
HST on Bonuses: Lyft pays this HST to you for the service you provide Lyft. You’ll also need to save this HST for the CRA.
Bonuses: We offer different bonuses and incentives for our drivers. When you successfully meet bonus requirements, you’ll see the additional earnings here.
The HST Collected and HST on Bonuses can be viewed in Lyft ride earnings statements.
The CRA requires all rideshare drivers to:
Here are these requirements step-by-step.
Registering for the HST is mandatory for Lyft drivers. The CRA requires drivers to apply for registration within 30 days of giving your first ride. Your registration effective date should be on or before your first ride. (The CRA is OK with you driving for Lyft as soon as you’re approved, but if you forget to apply for registration within this time they won’t be happy.)
If you’ve already registered for HST, you’ll just need to add your HST registration number to your Driver Dashboard in the Lyft Driver app.
To register for GST online, visit the Canada Revenue Agency’s site: cra.gc.ca/bro.
This site will give you a unique business number that you’ll need to use to register for the HST. When you complete your HST registration, you’ll get an HST registration number. You’ll need to add this HST registration number to the Driver Dashboard in your Lyft Driver app.
If you have questions on completing HST registration, please contact a tax professional.
This is the easy part. Passengers pay the HST you need to collect as part of their fare. You’ll also need to collect the HST paid on bonuses. We show you the HST collected in your Lyft ride earnings statements — the key thing you need to do is keep that money safe so you have it ready for the CRA when you file your HST return.
Pro tip: Many small business owners create a separate bank account for HST collected so they don’t accidentally spend money that is owing to the CRA.
Reporting the HST means filing an HST return.
You’ll need to calculate your net tax before you file an HST return. Your net tax is the difference, including any adjustments, between the amount of HST you collect and the amount of HST you’ve paid.
The amount of HST you collected is easy to find — just check either your monthly, quarterly, or annual Lyft ride earnings statement and look for the sections ‘HST Collected’ and ‘HST on Bonuses.’ Add these two figures together and you’ll have the total amount of HST collected for your Lyft activities.
The amount of HST you paid to Lyft will also be on your your monthly, quarterly, or annual Lyft ride earnings statement — just look for the section ‘HST on Lyft Fees.’ You can find the HST you’ve paid for other goods and services on the receipts and documents you’ve been collecting to claim eligible input tax credit.
Once you know your net tax, you’re ready to file your HST return. You can file your HST return online with the CRA. You may also be able to file your return on paper.
Remember, everyone’s tax situation is different, so a tax professional can help you find the best way to file your HST returns.
Pro tip: You’ll need to keep a record of all the HST you’ve paid, so consider speaking with a tax professional to learn what may work best for you. Recording HST you’ve paid on a regular basis can save you a major headache when your HST return is due.
More simply put: pay the net HST due to the CRA. There are three ways you can pay the CRA:
- At your Canadian financial institution
- Physical mail or post
Usually HST payments are due at the same time as your HST return — either monthly, quarterly, or annually. The payment deadline depends on your HST filing period.
A tax professional can help you figure out how often you need to file your HST returns, and they can even file your HST returns for you.
Here are some common questions about GST, HST, and CRA for drivers with Lyft.
- What info will I need to register for GST/HST?
- What steps do I need to follow to register for the HST online?
- Why does the HST amount on my ride earnings statements look different from other ridesharing companies?
- Where can I go for more help with HST?
Before you go online to register for the HST, you’ll need to prepare the following information:
- Your full legal name
- Your Social Insurance Number
- Your telephone number
- Your fax number (if you have one)
- Your mailing address
- A description of your business activities (that is, ridesharing services)
- Estimated ride earnings (the form will ask you for estimated sales)
- Effective date for your HST registration (that is, on or before your first ride, but drivers can apply for registration within 30 days of giving their first ride)
- Your HST return filing frequency (that is, monthly, quarterly, or annually)
Please see How to register for HST.
Why does the HST amount on my ride earnings statements look different from other ridesharing companies?
Lyft charges HST on the Lyft Fee and other service fees that you pay because Lyft is a Canadian company registered for HST. Other ride sharing companies may not be registered for HST and therefore don't charge HST on their fee. However, as a driver, if you're registered for HST, you can claim this tax back as an input tax credit.
Additional information can also be found on the CRA's website or by contacting the Canada Revenue Agency at 1 (800) 959-5525.
Every driver is unique. Every driver’s specific tax circumstances are also unique, so the information on this page may not cover your tax needs. Unfortunately, Lyft can’t provide you with tax advice, so speaking with a tax professional can be a great way to get help and advice for your specific circumstances.