Freelancing means selling your services to clients as a self-employed person rather than as an employee. No employer withholds tax or CPP for you, so registration, records and payments are your job. This page is part of the side hustles hub; freelance platforms covers where to find clients and making money online covers other online income.
Step 1: Choose a business structure
A new freelancer can start as a sole proprietor: you are the business, and its profit is part of your personal income. You report it on Form T2125 (Statement of Business or Professional Activities) with your T1 return. The trade-off is that you are personally responsible for the business’s debts.
The alternatives are a partnership (with someone else) or a corporation. Business structures in Canada compares them, including when a business name has to be registered, and should I incorporate my side hustle covers the costs and tax effects of incorporating.
Step 2: Keep business money separate
A separate bank account for business income and expenses makes bookkeeping easier and gives you a clean record if the CRA asks questions (what triggers a CRA audit).
Step 3: GST/HST registration
You have to register for the GST/HST once you make taxable sales in Canada and are no longer a small supplier: that happens when your taxable sales go over $30,000 in a single calendar quarter (register from that sale) or over the last 4 consecutive calendar quarters (by the end of the month after that quarter); below that you can register voluntarily.Once registered, you charge GST/HST on taxable services to Canadian clients and file returns. The rate depends on where the supply is made: the GST is 5% and the HST provinces charge one combined rate.
| Province or territory | Tax | GST | Provincial part | Total rate |
|---|---|---|---|---|
| Alberta | GST | 5% | none | 5% |
| British Columbia | GST + PST | 5% | 7% | 12% |
| Manitoba | GST + RST | 5% | 7% | 12% |
| New Brunswick | HST | 5% | 10% (in HST) | 15% |
| Newfoundland and Labrador | HST | 5% | 10% (in HST) | 15% |
| Northwest Territories | GST | 5% | none | 5% |
| Nova Scotia | HST | 5% | 9% (in HST) | 14% |
| Nunavut | GST | 5% | none | 5% |
| Ontario | HST | 5% | 8% (in HST) | 13% |
| Prince Edward Island | HST | 5% | 10% (in HST) | 15% |
| Quebec | GST + QST | 5% | 9.975% | 14.975% |
| Saskatchewan | GST + PST | 5% | 6% | 11% |
| Yukon | GST | 5% | none | 5% |
GST/HST on freelance income covers which services are taxable, zero-rated or exempt (including work for clients outside Canada), and input tax credits; the GST/HST calculator covers the Quick Method.
A freelancer registered for the HST bills an Ontario client $2,000 for a project. At the Ontario HST rate of 13%, the invoice adds $260 of HST, which the freelancer remits to the CRA (less any input tax credits).Step 4: Records and expenses
Keep every invoice, payment record and receipt. The CRA says to keep your records for six years from the end of the last tax year they relate to (unless it lets you destroy them earlier), at your Canadian residence or place of business unless it allows another place; you are responsible for them even when a bookkeeper or accountant keeps them, and you must make them available to the CRA on request.
Expenses you incur to earn the income are deducted on Form T2125, which lowers your net income. Some have their own limits: for example, only 50% of business meals and entertainment is deductible. Self-employed tax deductions lists the categories, home office expenses for the self-employed covers the work-space rules, and how to complete Form T2125 walks through the form.
Step 5: CPP on self-employment income
You contribute to the CPP if you are over 18, work in Canada outside Quebec and earn more than $3,500 a year; contributions stop when you turn 70, and from 65 someone already receiving a CPP or QPP retirement pension can choose to stop. Self-employed people pay both the employee and the employer share of CPP contributions on their net business income (11.90% above the basic exemption up to the first earnings ceiling, plus 8% CPP2 between the first and second ceilings), worked out on Schedule 8 and paid with the income tax return. A non-refundable tax credit is claimed on half of the base contributions, and the other half, the first additional contributions and all CPP2 contributions are deducted from income. The most a self-employed person pays in first-tier contributions (CPP1) for 2026 is $8,460.90. The earnings ceilings and the CPP2 maximum are in CPP contribution rates.
A freelancer outside Quebec with $30,000 of net self-employment income for 2026 and no other job pays $3,153.50 of CPP contributions: the $26,500 above the exemption times 11.90%.Neither income tax nor CPP is withheld from freelance income: the balance is due by April 30 even though self-employed people can file until June 15, and instalments may be due during the year, so some freelancers move a share of each payment into a separate savings account. The side hustle tax calculator estimates the total for your income and province.
Step 6: Tax instalments
You have to pay income tax by instalments for a year if your net tax owing is more than $3,000 ($1,800 if you live in Quebec on December 31) for that year and was also more than that in either of the two previous years. Instalments are due March 15, June 15, September 15 and December 15; if your main source of income is self-employment income from farming or fishing, there is one instalment due date, December 31. Tax instalments in Canada explains the reminders, the payment options and the interest on late or missed instalments.
Step 7: Filing your return
If you are self-employed, or the spouse or common-law partner of someone who is and you lived together at any time in the year, your return for a tax year is due by June 15 of the following year, unless your business expenditures are mainly the cost or capital cost of tax shelter investments (then it is due by April 30); any balance owing is still due by April 30, and paying by then avoids interest and penalties. Your return includes Form T2125 for the business and Schedule 8 for CPP. First-time self-employed taxes covers the first year in more detail.
Related guides
- Best freelance platforms for Canadians: fees on Fiverr, Freelancer.com, Guru and others
- How to make money online in Canada
- Best side hustles in Canada
- Side hustle taxes in Canada
- Gig economy worker rights
Sources
The figures and rules on this page come from these sources, last checked against them between September 5, 2026 and October 1, 2026. How we check facts.
- Canada Revenue Agency: Charge and collect the GST/HST
- Canada Revenue Agency: GST/HST calculator (and rates)
- Canada Revenue Agency: Line 8523 – Meals and entertainment
- Canada Revenue Agency: CPP contribution rates, maximums and exemptions
- Canada Revenue Agency: Due dates and payment dates - Personal income tax
- Canada Revenue Agency: When to register for and start charging the GST/HST
- Canada Revenue Agency: Keeping Records
- Canada Revenue Agency: The Canada Pension Plan enhancement
- Canada Revenue Agency: Employers’ Guide – Payroll Deductions and Remittances
- Canada Revenue Agency: Payment due dates - Required tax instalments for individuals
- Canada Revenue Agency: Who has to pay - Required tax instalments for individuals
- Canada Revenue Agency: Self-employed Business, Professional, Commission, Farming, and Fishing Income: Chapter 1
- Government of Canada: Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election
- Government of Canada: CPP: How much you could receive