Self-Employed Tax Calculator Canada 2026

How much tax does a self-employed person pay in Canada?

A self-employed person pays the same federal and provincial income tax as an employee on the same income, plus both halves of CPP: 11.9% of net earnings between $3,500 and $74,600, up to $8,460.90 in 2026, and 8% CPP2 on earnings from $74,600 to $85,000, up to $832. There is no EI unless you opt in to the special benefits program.

Worked example: $85,000 of net business income in Ontario in 2026, with the CPP deduction and credit applied as on Schedule 8. The calculator above uses a simpler split of the CPP relief, so its figure can differ slightly.

CPP on self-employment income: deduction and credit

You pay self-employed CPP with your return, not during the year, and it is worked out on Schedule 8 (Form RC381 if you have CPP and QPP income in different provinces). You get tax relief on it in two ways. Under section 60 of the Income Tax Act, half of the base contributions plus all of the enhanced contributions (the first additional CPP and CPP2) are a deduction on line 22200, which lowers taxable income. In the example that deduction is $5,773.45. The other half of the base contributions ($3,519.45) is a non-refundable credit on line 31000, with the matching provincial credit on line 58280 of your provincial Form 428. The contribution itself is added to your balance on line 42100.

Quebec residents pay QPP rather than CPP on self-employment income, calculated on Schedule U of the Quebec TP-1 return (line 445). They also owe QPIP premiums on self-employment income, calculated on Schedule R (line 439); QPIP is not included in the calculator above.

Reporting business income on form T2125

Sole proprietors and professionals report revenue and expenses on form T2125, Statement of Business or Professional Activities, filed with the T1. The CRA's guide T4002 explains which expenses qualify. Only net income (revenue minus allowable expenses) is taxed, so good records directly reduce your tax.

• Typical deductible expenses: supplies, software, advertising, professional fees, business insurance, phone and internet (business share), and vehicle costs for business trips.
• Business-use-of-home expenses, if the space is your principal place of business, or you use it only to earn business income and regularly meet clients, customers or patients there.
• Equipment such as computers is not deducted in one go; the CRA says you deduct the cost of depreciable property over several years as capital cost allowance (CCA).
• Personal expenses and your own CPP contributions are not business expenses; CPP gets its own deduction and credit on the return.

Deadlines and tax instalments for the self-employed

Self-employed people (and their spouses or common-law partners) can file their return until June 15, but any balance owing is due on April 30. For the 2025 tax year those dates were April 30, 2026 to pay and June 15, 2026 to file. Anything unpaid after April 30 accrues interest, even though the return itself is not yet late.

You must pay quarterly instalments when your net tax owing is more than $3,000 ($1,800 in Quebec) in the current year and in either of the two previous years. The due dates are March 15, June 15, September 15 and December 15. The CRA offers three ways to set the amount: the no-calculation option (pay what the reminder says), the prior-year option (based on last year's tax) and the current-year option (based on your own estimate of this year). Late or short instalments attract instalment interest, which the CRA only charges when it comes to more than $25 for the year.

In the example above, about $5,973 a quarter would cover the year. Many people simply move a fixed share of each payment they receive (here roughly 28%) into a separate savings account.

GST/HST registration: when you must charge sales tax

You must register for the GST/HST once your taxable sales are more than $30,000 in a single calendar quarter or over the last four consecutive calendar quarters; below that you are a "small supplier" and registration is optional. According to the CRA's guide RC4022, if you go over in a single quarter you are treated as registered from the day of the sale that took you over, and you have 29 days to register. The one exception is taxi and commercial ride-sharing: anyone providing those services must register even if they are a small supplier.

Registering voluntarily lets you claim input tax credits for the GST/HST you pay on business purchases, but you must then charge it to your clients. Sole proprietors who file GST/HST annually with a December 31 year-end follow the same dates as their income tax: payment by April 30 and filing by June 15. Use the sales tax calculator for the rate in your province.

Common mistakes self-employed Canadians make

• Spending the tax money. Nothing is withheld, so the bill for income tax and both halves of CPP arrives at once in April.
• Forgetting CPP. On $85,000 of profit, CPP and CPP2 alone are $9,293, before any income tax.
• Mixing personal and business accounts, which makes expenses hard to prove if the CRA asks.
• Missing the GST/HST threshold when one large contract pushes a quarter over the limit.
• Assuming June 15 is the payment deadline. It is only the filing deadline.