Self-Employed Tax Calculator: how it works in 2026, with a worked example

Questions people ask

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; the calculator gives the exact figure for your province.

Is the CPP I pay as self-employed deductible?

Half is. The employer half of the base contribution and all of the enhanced contributions are deducted from income on line 22200 and 22215; the employee half of the base contribution gets the 14% non-refundable federal credit (the lowest federal rate) like an employee. The calculator applies both.

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 ($1,800 in Quebec), the CRA expects quarterly instalments on March 15, June 15, September 15 and December 15. Interest applies if you skip them.

When do I have to charge GST/HST?

Once your taxable revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters. Below that you are a small supplier and may register voluntarily 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 (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?

You enter net business income, which is revenue after expenses (home office, vehicle, supplies, professional fees, CCA). The calculator does not calculate expenses for you; use your T2125 figures.

Should I incorporate?

Incorporation defers tax when you leave profit in the company (the small business rate is about 12% combined in most provinces) but adds accounting costs and does not reduce tax on money you take out to live on. The salary vs dividends calculator compares the two ways of paying yourself from a corporation; for most sole proprietors under about $100,000 of profit that they spend, incorporating is not worth it.

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 in most provinces, including CPP. The calculator gives your exact figure as a share of revenue and a monthly amount; a separate savings account for it avoids the April surprise.

Do I have to pay tax in instalments?

Only if your net tax owing was more than $3,000 ($1,800 in Quebec) both last year and this year. Then the CRA expects quarterly payments 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.

Is GST/HST part of my income tax?

No. GST/HST is a separate tax you collect from customers on the government's behalf 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. The calculator shows it on its own line for that reason.

What expenses can I deduct?

Anything reasonable that you spend to earn business income: supplies, software, professional fees, advertising, the business share of your phone, vehicle (by kilometres) and 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.