Selling online: how it is taxed, and what platforms report
Yan Zhou (周艳) · Licensed Life & Health Insurance Agent, Financial Services Regulatory Authority of Ontario (FSRA)
The short version
- Selling online is a business. In your own name it is self-employment, filed on a T2125.
- Platforms report seller data to CRA. Assuming it is invisible is a bad bet.
- Past $30,000 in sales you must register for GST/HST, same as any other business.
- Selling into other provinces means charging at the buyer’s provincial rate.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
First, what are you?
Selling in your own name makes you self-employed. Income goes on a T2125 inside your personal return.
Selling through a corporation makes it corporate income, on a T2.
Clearing out your own household items is generally not a business.
But buying stock to resell, trading repeatedly, with the intent of making money, is a business on any platform.
Platforms report to CRA
Digital platforms have reporting obligations for seller information. Your sales figures are visible to CRA.
So the idea that online income is invisible stopped being true some time ago.
Filing correctly from year one costs far less than back-filing with interest.
How is the income calculated?
On gross sales, not on what lands in your bank account.
Platform commission, payment processing fees and advertising are expenses. They belong in the expense column, listed separately.
Reporting the net payout as income makes those expenses vanish, which throws away a deduction you are entitled to.
What can you deduct?
- Cost of goods sold, based on what actually sold. Unsold stock is inventory, not an expense.
- Platform commission, payment processing fees and on-platform advertising.
- Packaging materials and outbound shipping.
- Photography equipment and props, apportioned to business use.
- The share of your home used for packing and storage, applied to utilities and rent.
Inventory is where the arithmetic most often goes wrong. Opening inventory plus purchases minus closing inventory gives the cost of goods sold for the year.
What about sales tax?
The threshold is the same as any business: past $30,000 on a rolling four-quarter basis, registration is mandatory.
Online selling adds one complication. The rate follows the buyer: Ontario buyers pay HST, Alberta buyers pay GST only.
Platforms can usually configure this, but the responsibility for getting it right is yours.
Details in Do I need to register for GST/HST?
Source: CRA, “When to register for and start charging the GST/HST”, checked 11 August 2026.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
