Do the side hustle

Don’t forget: It’s a business (on the side)

A side hustle can be a good way to bring in some extra pocket money over and above your full-time job. But don’t forget: It’s a business. That means accounting, invoices, receipts, and taxes. Here’s a look at what’s involved in creating a business on the side. Handle it right, and it could become your full-time hustle.

First, remember that you do have to declare any income you make from side hustles when you file your taxes, and you’ll pay income tax on it at your marginal rate. Of course, you get to deduct business expenses from the side hustle income, so keep your side hustle income separate from your other employment income. Best to have a separate bank account for it as well. Don’t worry, though, you won’t have to set up a corporation if you intend to keep the side hustle truly small and truly on the side.

You won’t have to collect GST/HST if the annual income from your side hustle is less than $30,000 over the last four consecutive quarters. Below that amount, you’re considered to be a “small supplier.” But be warned: As soon as you reach that threshold, you have 29 days from the first day of the second month after you’ve hit that magic $30,000 level to register with the CRA. You’ll likely get a visit from some tax types to check your books and explain the intricacies of charging and paying HST/GST.

Bear in mind, too, that once you register, you have to keep submitting GST/HST, even if your income falls below the $30,000 mark. So decide at the outset whether you want your side hustle to become a serious business proposition or whether you want to keep it under the HST radar.

You also have to be aware of the various legalities involved in your side hustle of choice: by-laws; licensing; insurance; and so on. The classic situation here is, for example, if you’re doing some painting on someone else’s property and you fall off a ladder and injure yourself. The liability situation can get pretty tangled up.

Here are some popular side hustles that can make you a few bucks.

Pet minding. This can involve checking up on people’s pets (most often cats and dogs) while they’re away on vacation. Or it can be a daily dog walk, which will be most effective if a number of neighbours hire you. A private walk could pay between $23 and $25, while group strolls run between $17 and $19. Suburban dog walks pay around $15 an hour, or up to $30 for a whole day of doggy daycare. Daily pet checkups for a week, involving a one hour visit to feed, water, and exercise the pet run about $100.

Renting out your home. This can be done most effectively through online brokerage agencies like Home Away, VRBO, and Airbnb. Recent average Airbnb rental for an entire home/apartment in Toronto was $178 per night. Pricier rentals downtown, in ritzy areas, or on subway lines can range up to $250 per night. Brokerage listing agencies will take a hefty cut, so read your agreement with them closely. And don’t forget to check on insurance and liability issues. Your insurance company will want to know if you’re renting out your property on a commercial basis. They’ll probably raise your premiums, so you’ll have to build that into what you charge for rent.

House sitting. People who go on vacation typically need someone to water plants, collect mail, perhaps put out cat food, re-set timers and so on in case of power outages, collect junk mail and flyers, etc. Fees range from about $12-$13 per day on the low side for minimal service, to an average of $25-$45 per day for standard services, to $50 or more for overnight stays. Typically, pet care will pay 3% more than standard service.

Sell items on eBay. Clean out your closet or basement, cull your bookshelves, drag out the junk from your garage. Even if it’s knick-knacks, selling a few here and there can really add up. And while an eBay account lets you list goods for sale, but be aware that you have to find the time to create listings and ship the items. You also pay a service fee to eBay. You can try Kijiji, but you’ll have to make your own arrangements for delivery and payment with any buyers. Kijiji also tends to be wide open to bots and phishing scams, so you may waste a lot of time with phony leads. What you make depends entirely on how you price your goods, from just a few bucks for some books to several hundred dollars if you can find a buyer for that in-demand 1970s teak credenza in the basement.

Virtual assistant. A virtual assistant is similar to an administrative or executive assistant, but the tasks are fulfilled remotely. Virtual assistants are typically hired on a per-hour basis, work from home, and can offer service to multiple clients. The average fee for a self-employed virtual assistant is currently between $30 and $55 per hour, depending on your skill set and expertise (for example, medical, real estate, or financial assistants can charge more because of their additional knowledge or education).

Website or blog designer. If you have strong IT and coding skills and some training or experience, building websites and blogs can be a lucrative side hustle. Project fees can range from $1,000 to $5,000, depending on the size and complexity of the site the client needs. Hourly rates for web designers are between $60 and $65.

Building a business

Basically, these are all small businesses, and many people dream of starting one up. There are plenty of advantages. First, you are your own boss, and in control of your own destiny. Then, you get to produce that product or service that no one can do as well as you. You get the satisfaction of seeing your business grow. And there are plenty of tax advantages, too, including lucrative deductions, credits, writeoffs, and income-splitting opportunities. If your business starts to grow, you stand a good chance of gaining true financial independence.

Start by doing what you love to do best, with something you know how to do really well or are really good at. You may already have some experience with a businesses on the side, providing services to friends, relatives, and colleagues part time, while working at your day job.

Get advice, support, and contacts from your existing network of friends, and business or professional colleagues, like-minded business groups, associations, and professional bodies, who can provide a goldmine of contacts, marketing know-how, and tricks of the trade to help get your side hustle off the ground and keep it flying. And then who knows? The sky’s the limit.

Robyn Thompson, CFP, CIM, FCSI, is the founder of Castlemark Wealth Management, a boutique financial advisory firm specializing in wealth management for high net worth individuals and families. Contact her directly by phone at 416-828-7159, or by email at rthompson@castlemarkwealth.com for a confidential planning consultation.

Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned are illustrative only and carry risk of loss. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please contact the author to discuss your particular circumstances.