Self-Employment Tax Calculator

Rates verified Oct 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

0.3%

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 Rate0.3%
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 Rate0.3%
Total Deductions−$29,350
Take-Home$70,650
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 thousandsTax Reserve PlannerCalculate exactly how much to set aside so CRA installments never surprise youBudget 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.

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About this calculator

Updated April 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.

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.

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 in March, June, September, and December. The tax reserve calculator helps you set aside the right percentage throughout the year to avoid surprises.

Go deeper - related guides

Long-form explainers that pair with this calculator.