"I Got This for Free!" — But Did You Really? Bookkeeping for Non-Cash Payments in Ontario

In today’s world of influencer marketing, brand partnerships, and small business collaborations, it’s not uncommon to receive free products, services, or subscriptions in exchange for a shoutout, review, or other form of promotion.

But here’s the catch: even if money didn't change hands, the CRA still sees value being exchanged. So how does that affect your bookkeeping?

Let’s break it down.

What Counts as Compensation?

If your business receives something—like skincare products, software subscriptions, clothes, candles, or even dog food—in exchange for a service like:

• Promoting the product on social media

• Creating user-generated content

• Writing a blog post or review

• Using your platform or audience in any way to benefit the other business

…it counts as business income.

Even if it’s a "gift" or labeled as a PR sample, if there’s an expectation that you'll do something in return, it’s compensation. And that means it needs to be recorded in your books.

What Do You Need to Track?

Here’s what you should enter in your bookkeeping software:

1. Fair Market Value
   Record the approximate fair market value (FMV) of the product or service you received. This is usually the retail price.

2. Date Received
   Log the date you received the product or subscription access.

3. Description
   Include a short description of what was received and why—e.g., “3-month skincare subscription in exchange for IG reel and blog post.”

4. Income Category
   This should be recorded as non-monetary income (barter income).

Here’s a simple example of an entry in your bookkeeping system:

Date Description Income (Value) Category
2025-05-10 Free skincare box for promo video $120.00 Barter Income

Do You Need to Pay Tax on This?

Yes, because it's considered income, it’s subject to income tax.

If you are registered for GST/HST, and the service you provided in return is a taxable service (like promotion or advertising), you also need to charge GST/HST on the fair value of the service provided, even if the payment was in the form of a product.

So yes… technically, you’d need to remit tax to the CRA even on that free face cream.

What You Can't Do: Disregard It

Many small businesses mistakenly ignore these transactions because no cash changed hands. But failing to report barter income can cause issues later, especially if your business is audited.

The CRA is very clear: if you're in business, all compensation—cash or otherwise—must be accounted for.

Tips to Stay on Top of It

• Create a folder for bartered deals. Store screenshots of agreements, emails, and product descriptions in case of an audit.

• Log it right away. It’s easier to record bartered income at the time you receive it, rather than hunting down values later.

• Use accounting software that allows journal entries or non-cash transactions. This will help you keep everything clean and accurate.

  📝 TL;DR

  If you’re receiving free stuff in exchange for promoting, reviewing, or sharing it—you’re being compensated, and that means your bookkeeping needs to reflect it.

  Want to make sure you’re tracking barter income properly? At Open Book, we help small business owners across Ontario stay organized, compliant, and confident with their numbers.

We’re always here to help if you have any questions!

Disclaimer: The information contained on this Website and the resources available for download through this website are not intended as, and shall not be understood or construed as, financial advice. While the professional at the Company have education and background in the field of business-accountancy and the information provided on this Website relates to financial issues, the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.