eTransfers have become a go-to method for quick, easy payments in Canada whether it’s splitting rent with a roommate or paying for freelance work. But when money moves digitally, it leaves a trail. That raises a big question: Can eTransfers be tracked by the CRA (Canada Revenue Agency)? The answer isn’t a simple yes or no it depends on how you’re using them.
In this article, we’re diving deep into how eTransfers work, what the CRA actually looks at, and what this all means for small business owners, gig workers, and anyone earning income outside a traditional job.
TL;DR: What’s Covered in This Guide?
- Can eTransfers be tracked by the CRA?
- What the CRA is actually monitoring
- How your bank plays a role
- When eTransfers might raise red flags
- Tips to stay compliant and avoid trouble
- What happens during a CRA audit
- One mistake to avoid if you’re earning extra income
So, Can eTransfers Be Tracked by the CRA?
Yes eTransfers can be tracked by the CRA if they have reason to investigate. Your eTransfers, like any bank activity, are not invisible. The CRA doesn’t routinely scan personal transactions, but they absolutely can access financial records through your bank during an audit or investigation.
Here’s the key part: your bank holds the data, and the CRA can legally request it if they suspect unreported income or tax evasion. This happens more often than you might think.
If you’re running a business, doing freelance work, or regularly receiving money for services, then the CRA considers that taxable income no matter how it arrives. It doesn’t matter if it’s a paper cheque or an eTransfer.
What Exactly Is the CRA Watching?
The CRA isn’t watching every $50 your friend sends you for dinner. But they do care about patterns. If you’re receiving frequent eTransfers from multiple people or large amounts that don’t match your tax filings, that’s a red flag.
Here’s what could catch their attention:
- Regular deposits labeled as “payment” or “invoice”
- Transfers from people who aren’t family or friends
- A mismatch between reported income and actual bank deposits
- Reports from others yes, anyone can anonymously tip off the CRA
They cross-reference tax returns with bank records when necessary. And when they do, they’ll look at everything: deposits, account balances, and transaction histories.
Are Banks Sharing My eTransfer Info Automatically?
Not directly. But under Canadian law, the CRA can issue what’s called a “Requirement for Information” to banks. This is a legal request to access your records. Your bank can’t say no.
Most often, this happens:
- During an audit
- If someone reports you
- If your lifestyle doesn’t seem to match your reported income
- When you’re part of a group or industry under active review
It’s not just big fish, either. In the past few years, the CRA has targeted entire industries like real estate, construction, and online freelancing (Source: Financial Post).
When Should You Start Worrying About eTransfers?
If you’re receiving money regularly say, every week or month and it’s not being reported as income, you could have a problem. Even if you’re just running a “side hustle,” the CRA still expects you to report that.
Here’s where people get tripped up:
- Freelancers who only work with small clients and get paid via eTransfer
- Airbnb or short-term rental hosts collecting payment outside the platform
- People doing trades, cash jobs, or online sales without declaring it
If you’re doing it more than occasionally, the CRA likely sees it as business activity. And businesses have to report earnings even if you don’t have a business license.
What Happens If the CRA Investigates You?
First, they’ll ask questions. Often, they’ll request your banking records and copies of your eTransfer history. That includes who sent the money, the amounts, and when it happened.
They may ask you to explain the sources of deposits. If it looks like income and you didn’t declare it, they can go back up to six years (or more in cases of fraud).
Penalties can include:
- Reassessment of taxes owed
- Interest charges on unpaid taxes
- Fines for failing to report income
- Criminal charges in rare cases involving fraud
But What About Personal Transfers Between Friends?
This is the part where it gets grey. If you send your roommate money for utilities or split a meal with friends, those eTransfers aren’t taxable. The CRA isn’t interested in personal cost-sharing.
But when you’re getting “thank-you” payments for favors like fixing someone’s computer or cutting hair at home and it becomes regular, they might see that as income.
The line is this: If it’s something you’d normally pay for in the marketplace, and you’re doing it for others, it’s probably taxable.
How Can You Protect Yourself?
Here’s the golden rule: If you’re earning money, report it. Even if it’s just a side gig. Once it’s on your tax return, you’re covered.
To stay safe:
- Keep records of all income, even small amounts
- Separate personal and business transactions in different accounts
- Include eTransfer payments in your reported income
- Use clear descriptions in your eTransfers (e.g. “gift” vs. “invoice”)
- File your taxes properly consider using software or a tax pro if needed
Only one list is allowed in this article, so take those five steps to heart.
A Common Misconception About eTransfers
A lot of people think that because eTransfers are informal or not on a public ledger like crypto, they’re under the radar. But the opposite is true. Banks store everything, and they’re required to keep those records for at least seven years.
That means even if you deleted the message or forgot about the transfer, the info is still sitting on a server somewhere and the CRA can get to it.
Why This Is Becoming a Bigger Deal in 2025
As more people turn to freelancing, gig work, and digital income, the CRA is stepping up its monitoring efforts. They’ve already cracked down on platforms like Airbnb and Uber, and they’re now going after informal income streams like TikTok creators, OnlyFans users, and even people selling on Facebook Marketplace.
If you’re receiving money through eTransfers and not declaring it, you’re part of the next wave they’re focusing on (Source: Globe and Mail).
Key Takeaways
- Yes, eTransfers can be tracked by the CRA, especially during audits or investigations.
- Your bank holds all the transaction data, and the CRA can request it legally.
- Receiving frequent eTransfers from non-personal contacts can raise red flags.
- If you’re earning money, even on the side, you must report it.
- Personal transfers between friends or family usually aren’t a problem.
- Keep good records, separate accounts, and always report your income honestly.
If you’re unsure whether your eTransfers might land you in hot water, it’s always better to ask now rather than deal with penalties later. Contact Us if you need help navigating CRA compliance or setting up a proper system for managing your income.