You're Self-Employed — That Means Tax Deductions
As a delivery driver in Canada, you're an independent contractor, not an employee. That means you file your own taxes and report your delivery income as self-employment income. The upside? You can deduct your business expenses from that income, which lowers the amount of tax you owe.
This guide covers the most common deductions for delivery drivers, how HST works, and what you need to file with the CRA.
What You Can Deduct
Here are the most common tax deductions available to delivery drivers in Canada:
Fuel
Gas is likely your biggest expense. You can deduct the business-use portion of your fuel costs. If you use your vehicle 70% for delivery work and 30% for personal use, you can deduct 70% of your fuel expenses.
Vehicle Insurance
Your auto insurance premium is deductible, again based on the business-use percentage of your vehicle. Make sure your insurance policy covers commercial or delivery use — standard personal auto insurance may not cover you while working.
Vehicle Maintenance and Repairs
Oil changes, tire rotations, brake pads, new tires, car washes — all deductible at your business-use percentage. Keep receipts for everything.
Vehicle Lease Payments or Depreciation (CCA)
If you lease your vehicle, you can deduct the business portion of your monthly lease payments (up to the CRA limit). If you own your vehicle, you claim Capital Cost Allowance (CCA) — a way to write off the depreciation of your vehicle over time. The CRA has specific rates and limits for CCA on vehicles, so check the current year's rules.
Phone and Data Plan
You need your phone to run delivery apps, navigate routes, and communicate. The business-use portion of your monthly phone bill is deductible. If you use your phone 80% for work, deduct 80%.
Parking and Tolls
Highway 407 tolls, parking fees while picking up packages — these are fully deductible as long as they're incurred during delivery work.
Other Expenses
- Phone mount, charger, and accessories — used for delivery navigation
- Insulated bags or delivery equipment — if you purchased them yourself
- Accounting or tax software — the cost of filing your taxes is itself deductible
How HST Works for Delivery Drivers
This is the part most drivers find confusing, so let's break it down:
Registering for an HST Number
If you earn more than $30,000 in gross revenue over four consecutive calendar quarters, you are required to register for an HST number with the CRA. Even if you're under that threshold, you can register voluntarily — and there's a good reason to.
Registration is free and takes about 10 minutes on the CRA website.
How HST Works with Weels
When you drive for Weels, here's how HST flows:
- Weels pays you your delivery earnings plus 13% HST on top (Ontario HST rate)
- You collect that HST as part of your weekly Stripe payout
- You then remit the HST to the CRA when you file your HST return
The HST you collect from Weels is not extra income — it's tax you're collecting on behalf of the government and passing along. However, you can claim Input Tax Credits (ITCs) on the HST you pay on your business expenses (fuel, maintenance, phone, etc.), which reduces the amount you actually remit.
Filing Frequency
Most delivery drivers file HST returns quarterly or annually with the CRA. When you register, you can choose your filing frequency. Quarterly is recommended so you don't end up with a large lump sum owing at year-end.
Keep Good Records
The CRA can ask for documentation at any time. Best practices for delivery drivers:
- Track your mileage — use a mileage tracking app or a simple spreadsheet to log delivery kilometres vs. personal kilometres
- Save all receipts — fuel, maintenance, insurance, phone bills. Digital copies are fine.
- Keep your Weels payout records — your weekly Stripe payout summaries show exactly what you earned and what HST was paid
- Separate your finances — consider a dedicated bank account or credit card for business expenses
When to File
As a self-employed individual in Canada, your key tax deadlines are:
- June 15 — deadline to file your personal income tax return (T1)
- April 30 — deadline to pay any taxes owing (even though filing is June 15, payment is due April 30)
- Quarterly or annually — HST return deadlines depend on your filing frequency
Start Driving with Weels
Earn $30+/hour delivering packages across the GTA with weekly Stripe payouts. Apply to drive with Weels — it takes about 5 minutes.