Nearly one in four Canadians earns income through a side hustle, but uncertainty about business registration, legal obligations and taxes could complicate efforts to turn those ventures into full-time businesses, according to a new survey commissioned by Ownr.
The 2026 Canadian Side Hustle Report found that 23 per cent of Canadians surveyed earn income from a side hustle, while 19 per cent of those who currently have one say they are likely to leave their regular job to pursue the venture full-time. The report highlights a gap between entrepreneurial interest and confidence in the requirements involved in formally operating a business.
Almost half of respondents, or 47 per cent, either have a side hustle or aspire to start one, according to the survey conducted by Ipsos on behalf of Ownr, an incorporation and business registration platform owned by Royal Bank of Canada.
The findings suggest that additional income remains a key motivation for Canadians pursuing ventures outside their regular employment, while the prospect of making those activities a primary source of income raises questions about financial readiness and compliance with business rules.
Financial pressures drive side hustles
The survey found that financial considerations were the leading reasons Canadians pursue side hustles. Thirty-nine per cent of respondents said they wanted to supplement their regular income, while 33 per cent cited the rising cost of living and 26 per cent said they wanted to pay down debt.
Other respondents were motivated by the opportunity to earn money from a hobby or skill, cited by 21 per cent, or to gain greater flexibility and control over their work, cited by 12 per cent.
For some entrepreneurs, these ventures already provide enough income to reduce or eliminate the need for conventional employment. Twenty-two per cent of current side hustlers said their ventures generate sufficient income that they do not need a regular job.
The trend is particularly evident among younger entrepreneurs. The report found that 55 per cent of Generation Z respondents with side hustles consider their activities to be real businesses, while 31 per cent said their ventures generate enough income that they do not need a regular job. Another 29 per cent said they were likely to pursue their ventures full-time.
Separate RBC data cited in the announcement found that 46 per cent of Gen Z business owners have both a side hustle and a full-time job.
"There's a lot of entrepreneurial ambition in Canada, and this data proves that even more of it may be hiding in plain sight," said Jordan Casey, chief executive officer of Ownr. "Eventually, a side hustle becomes something more than extra income -- it becomes a business. We want to help give those Canadians the confidence and tools they need to turn what they're building on the side into their dream business."
Time and compliance pose challenges
Balancing a side hustle with other responsibilities remains a major obstacle. Twenty-eight per cent of Canadians surveyed identified finding time between their regular jobs and personal obligations as the biggest challenge of running a side venture. Those who currently have side hustles spend an average of 13 hours a week on them.
Preventing burnout and maintaining work-life balance were each part of the broader challenge, with 25 per cent identifying burnout and work-life balance as an obstacle, while the same proportion said they did not know where to start.
Casey said the transition from supplemental income to a full-time business can introduce administrative and regulatory demands that entrepreneurs may overlook while managing limited time.
"What starts as extra income often becomes a realization: 'I'm actually good at this.' Then comes the thought, 'I could do this full-time.' That's where it gets hard," said Casey. "It's daunting for a reason. Side hustlers are already short on time, and when they're focused on making the leap to full-time, it's the legal and compliance steps that tend to fall through the cracks - whether they realize it or not."
The report found that 37 per cent of current side hustlers do not know when they need to register their businesses, while 38 per cent do not understand the legal requirements that apply to them.
The survey also identified differences between women and men in their reported understanding of business obligations. Fifty-eight per cent of women said they knew when they needed to register a business, compared with 69 per cent of men.
Women were also less likely to say they understood the legal requirements applying to their businesses, at 58 per cent compared with 67 per cent of men. On tax obligations, 67 per cent of women said they understood the requirements, compared with 74 per cent of men.
Financial readiness before expansion
The report identifies income and profitability milestones as important considerations for side hustlers weighing whether to leave regular employment. Casey advised entrepreneurs to assess their financial position before making a significant change, understand when business registration and other legal or tax requirements apply, and determine what they want their ventures to achieve.
The report also notes that moving to full-time entrepreneurship is not the only measure of success, encouraging business owners to define their own growth objectives and milestones.
Ownr provides digital tools for business registration, incorporation and ongoing corporate administration. The company is a portfolio business of RBCx, a division of RBC.