Running a side‑hustle or small passion project can feel informal: a few clients, some freelancers helping on design or social media, money moving through e‑transfers and PayPal. It’s easy to think, “We’re too small for CRA to care about T4As.”
But the moment you start paying people for services as part of a business, you’ve stepped into the same compliance world as bigger companies—just on a smaller scale.
Here’s what side‑hustle owners need to know about T4A slips when they pay freelancers.
Step 1: recognize when your side‑hustle is a business
If you’re:
• Charging clients for products or services
• Intending to make a profit (even if you reinvest it)
• Claiming expenses on your own tax return
…you’re likely running a business in CRA’s eyes, even if it’s part‑time. That means the way you pay others can have T4A implications.
Step 2: know who your “freelancers” are
Make a list of anyone you paid to help with your side‑hustle, such as:
• Designers or developers
• Virtual assistants or admins
• Social media managers
• Photographers or video editors
• Coaches or specialists you brought in for your clients
For each person, note:
• Their name
• How much you paid them in the year
• A few words about what they did
Step 3: understand why T4As might apply
T4A slips are used to report certain types of income that aren’t regular employment income. For side‑hustle owners, that often means:
• Fees you pay to independent contractors or freelancers for services
• Payments you deduct as business expenses on your own return
Even if your business is small, CRA may still expect slips for certain service payments, especially as amounts grow.
Step 4: separate business and personal payments
A common side‑hustle mistake is mixing:
• Personal payments (for example, paying a friend to help you move) with
• Business payments (paying a friend to design your logo for paying clients)
Only the business side is relevant for T4A purposes, but if everything flows through the same personal account, it gets hard to distinguish later.
Try to:
• Use a separate bank account or at least clear notes for business‑related payments
• Tag or label transactions in your banking app or spreadsheet so you can pull them out at tax time
Step 5: collect basic info from freelancers early
It might feel formal, but you’ll thank yourself later if you:
• Ask for legal name and address
• Ask whether they operate under a business name
• Let them know you may issue a T4A slip if required
You can build this into a simple one‑page onboarding form you send when you start working together.
Step 6: talk to your tax professional about thresholds and rules
Because every situation is a bit different, it’s smart to check with:
• A tax preparer or accountant who understands small businesses, or
• CRA’s latest guidance on T4A requirements
Bring your freelancer list and payment totals. Ask:
• “Based on these amounts and services, should I be issuing T4A slips?”
• “If so, what do you need from me to prepare them?”
Step 7: keep it simple and scalable
You don’t need enterprise tools to manage T4As for a side‑hustle, but you do need a system that can grow as you do. At minimum:
• A clean spreadsheet or tool where you track who you paid, what for, and how much
• A place where you store freelancer contact details
• A habit of updating it regularly, not only at tax time
As your side‑hustle grows into a bigger business, a dedicated tool like T4ASlip can take over the heavier lifting of organizing and generating slips.
Common myths for side‑hustle owners
• “We only pay by e‑transfer, so we don’t need slips.”
– The method of payment doesn’t change the tax rules.
• “They’re freelancers; they handle their own taxes.”
– True for their return, but you may still need to issue an information slip.
• “We only do this part‑time; CRA won’t care.”
– Size doesn’t automatically exempt you from reporting requirements.
How T4ASlip can help as you grow
If your side‑hustle starts paying several freelancers regularly, T4ASlip can help you:
• Keep contractor information in one place
• Pull in payment data from your records
• See at a glance who may need T4A slips
• Generate slips when it’s time to file
You can start simple and add more structure as your revenue and team grow.
Bottom line for side‑hustles
You don’t need a finance department to handle T4As correctly. You just need to:
• Treat your side‑hustle like a real business
• Keep basic records of who you pay and why
• Ask a professional whether T4As apply to your freelancers
• Build a lightweight but consistent process
Do that, and your side‑hustle can stay fun, profitable, and compliant at the same time.