How much tax do self-employed people pay in Canada?

The same income tax brackets as employees, plus both halves of CPP: 11.9% of net income between $3,500 and $74,600 in 2026, plus 8% on the next $10,400. There is no EI unless you opt in. On $80,000 of net income in Ontario the total is roughly a quarter of income.

Is the CPP I pay as self-employed deductible?

Half is. The employer half of the base contribution and all of the enhanced contributions come off your income on lines 22200 and 22215. The employee half of the base contribution gets the 14% federal credit, like an employee.

When do I have to pay instalments?

If your net tax owing, income tax plus CPP, was more than $3,000 in the current year and either of the two previous years, or $1,800 in Quebec. Then the CRA expects quarterly instalments on March 15, June 15, September 15 and December 15, and charges interest if you skip them. In your first profitable year there are no instalments. The whole bill is due April 30.

When do I have to charge GST/HST?

Once your taxable revenue passes $30,000 in a single calendar quarter or over four quarters in a row. Below that you are a small supplier, but you may still register to claim input tax credits. Quebec businesses register for QST as well.

What is the filing deadline for self-employed people?

June 15, 2027 for the 2026 return, and June 15 also applies to your spouse. Any balance owing is still due April 30, 2027, and interest runs from that date.

Does this include my business expenses?

No. You enter net business income, which is revenue after expenses, from your T2125 figures.

Should I incorporate?

Incorporating defers tax when you leave profit in the company, where the small business rate is about 12% combined in most provinces. But it adds accounting costs and does not cut tax on money you take out to live on. For most sole proprietors who spend under about $100,000 of profit, it is not worth it. The salary vs dividends calculator compares the two ways of paying yourself from a corporation.

What percentage of my income should I set aside for taxes?

It depends on your profit and province. Roughly 20% at $50,000 of profit, 25% to 30% at $100,000, and 35% or more above that, including CPP. A separate savings account for it avoids the April surprise.

Is GST/HST part of my income tax?

No. GST/HST is a separate tax you collect from customers for the government and remit on a GST/HST return, less the tax you paid on business purchases. It is never your income and should not be spent.

What expenses can I deduct?

Anything reasonable you spend to earn business income: supplies, software, professional fees, advertising, the business share of your phone, your vehicle by kilometres, your home office by square footage, 50% of meals with clients, and capital cost allowance on equipment. Keep receipts. The CRA can ask for them for six years.

Self-Employed Tax Calculator (Canada, 2026)

Start from what your clients pay you and what you spend. You get the tax and CPP you owe for the year and the share of every payment to set aside. It also tells you whether quarterly instalments apply and when. GST/HST to remit is shown as a separate line, because it is not your money.

Set aside from every payment22% ≈ $1,684 / monthOn $75,000 of profit ($90,000 revenue less $15,000 expenses) in Ontario you owe about $20,213 for 2026: $11,720 of income tax and $8,493 of CPP (both halves). No instalments are required this year (last year's tax was under $3,000). The balance is due April 30, 2027.

You keep $54,787Income tax $11,720CPP (both halves) $8,493

Revenue	$90,000.00
Expenses	− $15,000.00
Net business income (line 13500)	$75,000.00
CPP on self-employment (11.90%, both halves)	$8,492.90
Federal income tax	$7,755.45
Ontario income tax	$3,964.22
Total owing for 2026	$20,212.57
Marginal rate on your next dollar of profit (tax + CPP)	35.3%
Equivalent T4 salary (same take-home)	$71,525

Once revenue passes $30,000 in four quarters in a row, you must register for GST/HST and charge it. You then get to claim back the GST/HST on your expenses.

Key dates for 2026

Instalment due March 15, 2026	not required
Instalment due June 15, 2026	not required
Instalment due September 15, 2026	not required
Instalment due December 15, 2026	not required
Balance due (interest starts after this)	April 30, 2027
Return due (self-employed and spouse)	June 15, 2027

You must pay instalments when net tax owing is over $3,000 this year and in either of the two years before. The CRA's reminders use last year's amount (the "prior-year option"). You can instead pay based on your estimate for this year, but you pay interest if you are short.

Show the math

Your net business income is added to your other income and taxed at the 2026 Ontario brackets with basic credits. CPP is 11.90% of net income between $3,500 and $74,600, plus 8% up to $85,000. The employer half and the enhanced part are deductible. The base employee half is a credit. There is no EI unless you opt in for special benefits. The set-aside is the balance owing as a share of revenue. The equivalent salary is the T4 pay that leaves the same after-tax cash once the employee's CPP and EI come off. Not modelled: capital cost allowance, the details of Quebec's $1,800 instalment threshold, and Quebec's separate provincial return beyond the tax itself.

How this calculator works

A sole proprietor’s business income is taxed on the personal return. Three things differ from a salary:

CPP is doubled. Employees pay 5.95% and their employer matches it. The self-employed pay both, 11.9% on net income between $3,500 and $74,600, plus 8% CPP2 up to $85,000.
Half of it is deductible. The employer half of the base contribution and all enhanced contributions reduce taxable income. The employee half earns a credit.
No EI and no Canada employment amount. EI is optional for the self-employed and covers special benefits only. The $1,501 employment credit applies to employment income only.

After those adjustments the calculator runs the same 2026 federal and provincial tax engine as the income tax estimator.

Worked example: $80,000 net business income in Ontario

Line	Amount
Net business income	$80,000.00
CPP, both halves	$8,892.90
Deductible CPP (employer half + enhanced)	− $5,373.45
Taxable income	$74,626.55
Federal tax	$8,698.45
Ontario tax	$4,535.12
Total owing (tax + CPP)	$22,126.47
Set aside per month	$1,843.87

That is 27.7% of net income. An employee on the same salary pays 23.2% in income tax plus the employee half of CPP, or 24.6% with EI. The difference is the employer half of CPP.

Assumptions

Single filer, basic personal amount only, no EI opt-in, no other credits.
Quebec: QPP at 12.6% and QPIP at the self-employed rate. Quebec’s deduction for workers does not apply to business income.
Net income is entered after all business expenses.

What to register for and when

Self-employment means two registrations and a different tax calendar. Missing the GST/HST threshold is the most common and most expensive mistake.

Register for a GST/HST account once revenue passes $30,000 in a quarter or over four quarters. You can register earlier to claim input tax credits. In Quebec, register with Revenu Québec.Register for a GST/HST account ↗
Quebec: register for both the GST and the QST through Revenu Québec.Revenu Québec: registering for the GST and QST ↗
Set aside the tax and CPP the tool calculated each month. The balance is due April 30, even though the return is due June 15.Business income tax deadlines ↗
Once you owe more than $3,000 two years running, the CRA expects quarterly instalments (March, June, September, December).Paying your income tax by instalments ↗
Get a business number and, if you hire anyone, a payroll account, through Business Registration Online.Business Registration Online ↗

Common questions

Frequently asked questions

How much tax do self-employed people pay in Canada?: The same income tax brackets as employees, plus both halves of CPP: 11.9% of net income between $3,500 and $74,600 in 2026, plus 8% on the next $10,400. There is no EI unless you opt in. On $80,000 of net income in Ontario the total is roughly a quarter of income.
Is the CPP I pay as self-employed deductible?: Half is. The employer half of the base contribution and all of the enhanced contributions come off your income on lines 22200 and 22215. The employee half of the base contribution gets the 14% federal credit, like an employee.
When do I have to pay instalments?: If your net tax owing, income tax plus CPP, was more than $3,000 in the current year and either of the two previous years, or $1,800 in Quebec. Then the CRA expects quarterly instalments on March 15, June 15, September 15 and December 15, and charges interest if you skip them. In your first profitable year there are no instalments. The whole bill is due April 30.
When do I have to charge GST/HST?: Once your taxable revenue passes $30,000 in a single calendar quarter or over four quarters in a row. Below that you are a small supplier, but you may still register to claim input tax credits. Quebec businesses register for QST as well.
What is the filing deadline for self-employed people?: June 15, 2027 for the 2026 return, and June 15 also applies to your spouse. Any balance owing is still due April 30, 2027, and interest runs from that date.
Does this include my business expenses?: No. You enter net business income, which is revenue after expenses, from your T2125 figures.
Should I incorporate?: Incorporating defers tax when you leave profit in the company, where the small business rate is about 12% combined in most provinces. But it adds accounting costs and does not cut tax on money you take out to live on. For most sole proprietors who spend under about $100,000 of profit, it is not worth it. The salary vs dividends calculator compares the two ways of paying yourself from a corporation.
What percentage of my income should I set aside for taxes?: It depends on your profit and province. Roughly 20% at $50,000 of profit, 25% to 30% at $100,000, and 35% or more above that, including CPP. A separate savings account for it avoids the April surprise.
Is GST/HST part of my income tax?: No. GST/HST is a separate tax you collect from customers for the government and remit on a GST/HST return, less the tax you paid on business purchases. It is never your income and should not be spent.
What expenses can I deduct?: Anything reasonable you spend to earn business income: supplies, software, professional fees, advertising, the business share of your phone, your vehicle by kilometres, your home office by square footage, 50% of meals with clients, and capital cost allowance on equipment. Keep receipts. The CRA can ask for them for six years.

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Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.

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Data verified for tax year 2026: September 7, 2026 Updated September 7, 2026 By Nishant Malik, founder of GlassLayer