Etsy Taxes in Canada: What to Report and What Etsy Tells the CRA

Prepared by Toronto Tax & Accounting Solutions Inc. and reviewed by Behroz Rizvi, owner. This article provides general information and may not apply to every tax situation.

Etsy income is generally taxable in Canada. If you sell on Etsy as a business, you report your gross sales and your eligible expenses on Form T2125 with your personal tax return, even when Etsy sends you no tax slip. Since 2024, Etsy also reports certain Canadian sellers to the CRA, so the CRA can compare what Etsy reports with what is on your return.

Does Etsy report my sales to the CRA?

In many cases, yes. Canada’s Reporting Rules for Digital Platform Operators took effect on January 1, 2024, and require platforms such as Etsy to give the CRA details about their Canadian sellers. The CRA excludes a seller with fewer than 30 sales of goods and total payments of no more than $2,800 in the year (see who is affected).

Etsy’s own help page says it reports a Canadian seller who completes 30 or more transactions in physical goods in a calendar year, makes $2,800 or more on physical goods after taxes and fees, or makes any sales of made-to-order digital items. Etsy says the information it reports includes your name, address, date of birth, Social Insurance Number and the bank account your sales are paid to, plus your number of transactions, the amount paid to you each quarter and the fees it charged. If you operate as a business entity, Etsy says it reports your legal name, address, GST/HST number where available, business number and bank account instead. See What information does Etsy report for Canadian sellers.

The CRA says your platform must give you a copy of the information reported about you by January 31 each year. If Etsy asks for missing details and you do not provide them in time, Etsy says it will pause your shop until you confirm your information.

Why Etsy’s number may not match your sales

Etsy says the amount it reports is your gross sales minus refunds, fees and taxes Etsy remits. That is lower than what you actually sold. On your return you report your gross sales, and the fees then become expenses. Keep your Etsy sales and payment reports so you can reconcile the two figures if the CRA asks.

What to report and what you can deduct

If you are carrying on a business, you report the income and may deduct eligible expenses. The CRA says expenses must be reasonable, relate directly to the business, not be personal and be supported by your records. See the CRA’s business expenses guidance. Common examples for Etsy sellers include:

• Etsy listing, transaction and payment processing fees
• Shipping labels and postage you pay
• Packaging and supplies
• Materials and the cost of items you buy to resell (see inventory and cost of goods sold)
• Advertising, including Etsy Ads
• Software, photography and design tools
• A business-use share of internet, phone and home costs
• Equipment such as a printer or cutting machine, which may be claimed over several years rather than all at once (current or capital expenses)

We review each item. Having a receipt does not mean an expense qualifies.

Do I need to charge GST/HST on Etsy sales?

You must register once your total taxable sales pass $30,000 in a single calendar quarter or over four consecutive calendar quarters. Below that you are a small supplier and registration is optional. Our guide to GST/HST on online sales explains the test and the 29-day registration window.

Is my Etsy shop a hobby or a business?

That depends on the facts, such as whether you run it to make a profit and in a commercial way. Our guide to hobby or business for online sales sets out the factors.

What if I did not report past Etsy income?

The CRA says that if you did not report income from platform sales, you may owe penalties and interest as well as the tax, and that correcting your tax affairs voluntarily may avoid or reduce them. The CRA’s options include asking for a change to a past return or applying under the Voluntary Disclosures Program. If this applies to you, contact us and we will review the years involved.

Records Etsy sellers should keep

• Etsy sales and payment account reports for the year
• Etsy fee statements and ad invoices
• Supplier invoices for materials and stock, and a year-end count of unsold items
• Shipping and packaging receipts
• Bank and credit card statements for the account you use for the shop
• Your GST/HST account number and returns, if you are registered

Etsy tax questions

Do I pay tax on Etsy if I only sell a few items?

There is no minimum amount for reporting business income. Whether a small activity is a business depends on the facts. The platform reporting rules have their own exclusion for very small sellers, but that exclusion does not decide your income tax.

Do I report my gross sales or my Etsy payouts?

Report gross sales. Etsy fees, payment processing fees and shipping costs you pay are then claimed as expenses when they are eligible.

Do I need to tell the CRA I am an Etsy seller?

You report the income on your tax return. If your taxable sales pass $30,000 you must also register for GST/HST.

How we can help

Toronto Tax & Accounting Solutions Inc. prepares tax returns and keeps the books for Etsy sellers across Canada, from our Scarborough office or entirely online. A self-employed return starts from $149.99 and monthly bookkeeping from $99, both before HST. See our page for online sellers and content creators or visit torontax.ca.

Related guides

• Tax and bookkeeping for online sellers and content creators
• Amazon seller taxes in Canada
• GST/HST on online sales
• Hobby or business?
• Inventory and cost of goods sold
• eBay taxes in Canada
• YouTube taxes in Canada

Official sources

• CRA: Reporting rules for digital platforms
• CRA: Who is affected
• CRA: What information is shared
• CRA: Business expenses
• CRA: When to register for and start charging the GST/HST
• Etsy: What information does Etsy report for Canadian sellers (platform help page)

Last reviewed: November 8, 2026. This article is general information, not advice for a specific situation. Platform help pages are linked for platform-specific statements.