An increasing number of working Canadians are turning to the gig economy for extra cash, but a wealth planning expert says that earnings from side hustles still count as taxable income.

“With the cost of living going up, more and more people are finding extra ways to earn income,” Julie Seberras, head of wealth planning at Manulife Wealth, told BNN Bloomberg in a Monday interview.

“But that income is of course taxable and does need to be reported on your annual tax return, so whether that's from an employer, the gig economy or a side hustle, that all needs to be included, and you need to pay tax on that at your marginal tax rate.”

Seberras recommended that anyone with a side-gig keep records of the money they earn throughout the year, including receipts and invoices. She noted that expenses can then be deducted when it comes time to file.

“These are reasonable expenses that you've incurred for the purposes of earning income, and of course, you will want good invoices and receipts to back up those expenses,” she said.

Seberras said this includes any home office-related expenses, which can be claimed on a proportionate basis.

“That may be the number of rooms within your house, so it's one out of six rooms in your household, or maybe that's a percentage of the square footage,” she said.

“So if that particular home office makes up a certain percentage of the overall square footage of your home, then just the expenses related to earning the income for that proportion of your house would be eligible.”

Seberras said it’s important that people keep track of their total yearly earnings from side hustles because once someone brings in more than $30,000, they need to start charging GST or HST, depending on the province they live in.

“If you are earning over that $30,000, not only do you need to charge it, you need to collect it and you need to remit it,” she said.

“So I would suggest in that case that you're keeping that money maybe in a separate account, so when it comes time to file that HST return quarterly, you have that money liquid, ready and available.”

Seberras also recommended that people with side-gigs think ahead about how much tax they’ll owe at the end of the year so they can put it aside for when it comes due.

She also said that self-employed people should keep in mind that it’s often their responsibility to contribute both the employer and employee portion of the Canada Pension Plan, which is 5.95 per cent each, for a total of 11.9 per cent.

Seberras recommended that gig workers keep some of their earnings aside throughout the year so that it’s available when reporting each spring, reiterating that whatever the side hustle, “it’s not tax free.”