Self-Employment Tax Calculator

Rates verified Nov 2026 · Sources: CRA, Service Canada

ExampleRevenue $120,000 · Expenses $20,000 · Ontario · Double CPP comparison

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💼Self-Employment Cost

Net take-home · Ontario · 2026

$70,650gross $120,000 · costs $2,476/yr more than employee
Net income $100,000·Deductions −$29,350·⚠ GST/HST registration required

Effective rate

29.3%

of net business income

Double CPP

$9,292

both halves

Income tax

$20,058

federal + provincial

Net income

$100,000

after $20,000 expenses

💼Business Income
$
$
Net Business Income$100,000
Marginal Rate29.6%
Total Deductions−$29,350
📊Self-Employment Breakdown
Gross Revenue$120,000
Business Expenses−$20,000
Net Business Income$100,000
CPP (Employee Portion)−$4,646
CPP (Employer Portion)−$4,646
Total Double CPP−$9,292
Federal + Provincial Tax−$20,058
Effective Tax Rate29.3%
Total Deductions−$29,350
Take-Home$70,650
🏦Freelancer tax set-aside
Set aside each month$2,446
Share of gross revenue24.5%
Quarterly instalment (if required)$7,338

Covers income tax plus both halves of CPP/CPP2, not GST/HST. CRA asks for quarterly instalments (Mar 15, Jun 15, Sep 15, Dec 15) when your net tax owing is over $3,000 this year and in either of the two previous years. At this income, assuming last year was similar, you would likely need to pay instalments.

If you earned $100,000 as a T4 employee at the same income level:
Employee CPP (half)−$4,230
EI Premiums−$1,123
Income Tax−$21,521
Employee Take-Home$73,126
Self-employment costs $2,476/yr more than employment (mainly due to double CPP)
🧾GST / HST Obligations
⚠ Your revenue exceeds $30,000 - GST/HST registration is mandatory.
▸Threshold: Must register for a GST/HST account once revenue exceeds $30,000 in any 12-month period.
▸HST rates: ON 13% · BC 5% GST · AB 5% GST · QC 5% GST + 9.975% QST · NS 15%.
▸Remittance: Quarterly (or annual if under $1.5M revenue). GST/HST collected is not your income - remit it to CRA.
▸Quick Method: Small businesses earning under $400,000 can use the GST/HST Quick Method - remit a flat % instead of tracking every ITC.
CRA – GST/HST registration ↗
▸
Home office: Proportional rent/mortgage interest, utilities, internet
▸
Vehicle: Business % of fuel, insurance, maintenance, depreciation (CCA)
▸
Software & tools: Subscriptions, apps, equipment under $1,500 (expensed immediately)
▸
Professional fees: Accountant, lawyer, bookkeeper fees fully deductible
▸
Meals & entertainment: 50% deductible for client meetings
▸
Professional development: Courses, conferences, books related to your field
▸
Health insurance: Private health services plan premiums deductible for sole props
▸
Marketing & advertising: Website, ads, business cards, photography
CRA – Business expenses guide ↗

What's Next?

Should You Incorporate?Compare sole proprietorship vs corporation - the 9% SBD rate can defer thousandsBudget PlannerFactor business expenses and tax reserves into your monthly budgetSalary & TaxCompare your freelance take-home against employment income

Estimates based on 2026 CRA rates. Does not include CPP2, provincial health premiums, or GST/HST obligations. Register for GST/HST once revenue exceeds $30,000 in any 12-month period. Consult a CPA. Not financial advice. Source: canada.ca.

Keep your numbers moving

Jump into related tools with your next best calculation.

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About this calculator

Updated November 2026

Self-employed Canadians pay both the employee and employer portions of CPP - roughly double what a salaried worker pays - plus face quarterly tax instalments once net tax owing exceeds $3,000. This calculator shows the true cost of self-employment income vs an equivalent salary and projects how much to hold back for taxes, CPP, and HST.

What you can do with it

  • Compare a $100,000 self-employed contract vs a $100,000 salary offer.
  • Project combined income tax + double CPP for your province.
  • See the CPP2 layer that kicks in on earnings above the YMPE.
  • Plan for HST/GST if you'll exceed the $30,000 small supplier threshold.
  • See how much to set aside each month for income tax and CPP, and your quarterly CRA instalment.

How the math works

Self-employment income is subject to federal + provincial income tax at your bracket, plus 11.9% combined CPP (5.95% × 2) on earnings between $3,500 and $74,600, plus 8.0% CPP2 (4.0% × 2) on earnings between $74,600 and $85,000 in 2026. EI is not automatic - self-employed Canadians can opt in voluntarily for $1,049.12/year for maternity/sickness benefits.

Canadian context - 2026

Maximum 2026 CPP + CPP2 for a self-employed earner at $85,000+ is approximately $9,293 - vs $4,646 for a T4 employee at the same income. The additional cost is deductible (employer portion) on your T1, but you still need to budget the cash flow.

Official sources

Frequently asked questions

How is CPP different for self-employed Canadians?

Employees pay half of CPP premiums and employers pay the other half. Self-employed individuals pay both the employee and employer portions-roughly double-which in 2026 means a maximum combined base CPP contribution of $8,460.90 (plus CPP2, up to $832 more). This is a significant cost that many new self-employed Canadians underestimate.

What business expenses can self-employed Canadians deduct?

Common deductions include a home office (proportional to space used for business), vehicle expenses, equipment, software subscriptions, professional development, insurance, and a portion of phone and internet. The expense must be incurred to earn business income. Keep receipts and consult a CPA for your specific situation.

Do I need to pay quarterly tax instalments as a self-employed person?

CRA requires quarterly instalments if your net tax owing exceeds $3,000 in the current year and either of the two prior years. Instalments are due March 15, June 15, September 15 and December 15. The "Freelancer tax set-aside" panel shows a monthly amount and the quarterly instalment for your income.

How much should I set aside for taxes as a self-employed person in Canada?

A rough rule of thumb is 25–35% of net business income, depending on your province and total earnings. That covers federal and provincial income tax plus both halves of CPP. GST/HST you collect is separate and goes to CRA on top of that. The set-aside panel above gives a monthly amount for your income and province.

What happens if I miss a CRA instalment deadline?

CRA charges instalment interest on late or insufficient quarterly payments, at the prescribed rate on overdue amounts (7% for October–December 2026, set quarterly). If the interest is large, CRA can add an instalment penalty. Moving the monthly set-aside into a separate account avoids the problem.