These tables show the income tax and CPP a self-employed person pays on a given net self-employment income: business revenue minus the expenses you claim on Form T2125. Every figure is computed from the 2026 federal and provincial tax brackets, basic personal amounts and CPP rates, for a single person whose only income is from self-employment, claiming only the basic credits. They don’t cover Quebec, where the QPP and QPIP replace the CPP and EI rules used here. For the rest of the hub, see self-employed taxes in Canada.
What a self-employed person pays
- Income tax, federal and provincial, at the same rates as everyone else, on taxable income.
- CPP. 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. For 2026, that is a maximum of $8,460.90 on net earnings between $3,500 and $74,600, plus up to $832.00 of CPP2 on earnings up to $85,000. The Schedule 8 section below works through the split.
- No EI unless you choose to register to be eligible to receive Employment Insurance special benefits.
- Possibly instalments. Because nothing is withheld from self-employment income, the CRA can ask for quarterly instalments once your balance owing passes its threshold; taxes in your first year of self-employment covers who has to pay them and when.
Income tax and CPP by net income
Each row is one net income; CPP is the same in every province outside Quebec, income tax isn’t. “Left after tax and CPP” is what remains of the net income.
Ontario
Net self-employment incomes chosen for illustration; tax and CPP computed for the 2026 tax year, including the Ontario surtax and Ontario Health Premium.
| Net self-employment income | CPP (both shares) | Income tax | CPP + income tax | Left after tax and CPP | CPP + tax as % of income |
|---|---|---|---|---|---|
| $40,000 | $4,344 | $4,221 | $8,565 | $31,435 | 21.4% |
| $60,000 | $6,724 | $7,879 | $14,603 | $45,397 | 24.3% |
| $80,000 | $8,893 | $13,234 | $22,127 | $57,873 | 27.7% |
| $100,000 | $9,293 | $19,045 | $28,338 | $71,662 | 28.3% |
| $150,000 | $9,293 | $38,349 | $47,642 | $102,358 | 31.8% |
| $200,000 | $9,293 | $61,165 | $70,458 | $129,542 | 35.2% |
British Columbia
Same net incomes, British Columbia, 2026 tax year.
| Net self-employment income | CPP (both shares) | Income tax | CPP + income tax | Left after tax and CPP | CPP + tax as % of income |
|---|---|---|---|---|---|
| $40,000 | $4,344 | $3,679 | $8,023 | $31,977 | 20.1% |
| $60,000 | $6,724 | $7,519 | $14,243 | $45,757 | 23.7% |
| $80,000 | $8,893 | $12,450 | $21,343 | $58,657 | 26.7% |
| $100,000 | $9,293 | $17,977 | $27,270 | $72,730 | 27.3% |
| $150,000 | $9,293 | $35,393 | $44,686 | $105,314 | 29.8% |
| $200,000 | $9,293 | $56,245 | $65,538 | $134,462 | 32.8% |
Alberta
Same net incomes, Alberta, 2026 tax year.
| Net self-employment income | CPP (both shares) | Income tax | CPP + income tax | Left after tax and CPP | CPP + tax as % of income |
|---|---|---|---|---|---|
| $40,000 | $4,344 | $3,720 | $8,064 | $31,936 | 20.2% |
| $60,000 | $6,724 | $7,596 | $14,320 | $45,680 | 23.9% |
| $80,000 | $8,893 | $12,834 | $21,727 | $58,273 | 27.2% |
| $100,000 | $9,293 | $18,812 | $28,105 | $71,895 | 28.1% |
| $150,000 | $9,293 | $35,557 | $44,850 | $105,150 | 29.9% |
| $200,000 | $9,293 | $54,869 | $64,162 | $135,838 | 32.1% |
The same net income in every province
A net self-employment income of $80,000, chosen for illustration, in each province and territory except Quebec (2026 tax year). CPP is $8,893 everywhere; the difference is provincial income tax.
| Province or territory | Income tax | CPP + income tax | Left after tax and CPP | CPP + tax as % of income |
|---|---|---|---|---|
| Newfoundland and Labrador | $15,483 | $24,376 | $55,624 | 30.5% |
| Prince Edward Island | $15,920 | $24,813 | $55,187 | 31.0% |
| Nova Scotia | $16,805 | $25,698 | $54,302 | 32.1% |
| New Brunswick | $15,124 | $24,017 | $55,983 | 30.0% |
| Ontario | $13,234 | $22,127 | $57,873 | 27.7% |
| Manitoba | $15,212 | $24,105 | $55,895 | 30.1% |
| Saskatchewan | $14,427 | $23,320 | $56,680 | 29.1% |
| Alberta | $12,834 | $21,727 | $58,273 | 27.2% |
| British Columbia | $12,450 | $21,343 | $58,657 | 26.7% |
| Yukon | $12,615 | $21,508 | $58,492 | 26.9% |
| Northwest Territories | $12,404 | $21,297 | $58,703 | 26.6% |
| Nunavut | $11,321 | $20,214 | $59,786 | 25.3% |
Self-employed vs employee at the same income
An employee earning an $80,000 salary and a self-employed person with $80,000 of net self-employment income, both in Ontario (2026 tax year, basic credits only).
| Item | Employee ($80,000 salary) | Self-employed ($80,000 net income) |
|---|---|---|
| CPP | $4,446 | $8,893 (both shares) |
| EI | $1,123 | $0 |
| Income tax (federal + Ontario) | $14,128 | $13,234 |
| Left after tax, CPP and EI | $60,303 | $57,873 |
The self-employed person pays the employer’s CPP share as well, but deducts part of the CPP from income and pays no EI. The comparison also leaves out what differs in practice: an employer pays its own CPP and EI share on top of the salary, while a self-employed person’s $80,000 is what is left after business expenses, which can be deducted (see self-employed tax deductions). Contractor vs employee taxes covers how the CRA decides which one you are.
A worked example: from revenue to take-home
A freelance web developer in Ontario with $95,000 of revenue and the expenses below, all figures chosen for illustration. Which costs qualify, and how much of each, is covered in self-employed tax deductions and the business-use-of-home expenses guide.
| Expense | Amount |
|---|---|
| Business-use-of-home expenses | $4,000 |
| Capital cost allowance on a computer | $2,000 |
| Software subscriptions | $1,500 |
| Courses and conferences | $1,000 |
| Accounting fees | $1,500 |
| Total expenses | $10,000 |
| Step | Amount |
|---|---|
| Revenue | $95,000 |
| Minus expenses | −$10,000 |
| Net self-employment income | $85,000 |
| Minus CPP (both shares) | −$9,293 |
| Minus income tax (federal + Ontario) | −$14,597 |
| Left after tax and CPP | $61,110 |
CPP and income tax together come to $23,890, or 28.1% of net income. Taxable income is lower than net income here: the CPP deduction described next comes off first.
How Schedule 8 splits CPP into a deduction and a credit
A self-employed person works out CPP on Schedule 8, Part 4 (“contributions on self-employment income and other earnings only”) when there is no employment income. The schedule splits the contributions three ways, and only the base contributions are shared between a deduction and a credit:
- Base contributions are 9.9% (twice the employee’s 4.95%) of net earnings between the basic exemption and the YMPE. 50% of them is claimed as a non-refundable credit on line 31000 (and the provincial or territorial credit on line 58280 of Form 428). The other half is deducted from income.
- First additional contributions are 2% on the same band, and are deducted in full.
- Second additional contributions (CPP2) are 8% of earnings between the YMPE and the YAMPE, also deducted in full.
The deduction (half the base plus all first additional and CPP2 contributions) goes on line 22200, and the total you owe goes on line 42100. In the CRA’s words for the self-employed: “Claim a non-refundable tax credit on 4.95% of the base CPP contributions, and claim a tax deduction on the other 4.95%”, and the enhanced and CPP2 contributions are deductible (CRA). Line 22215 is the deduction for enhanced contributions on employment income; it comes into play when you also have a job, and Schedule 8 then uses Part 5 instead of Part 4. A deduction lowers taxable income, so it saves tax at your marginal rate; the federal credit is worth the lowest federal rate times the amount claimed.
Two net self-employment incomes for the 2026 tax year: $60,000, chosen for illustration, and any income at or above the YAMPE ($85,000), where every part is at its maximum.
| Contribution | $60,000 net income | At or above the YAMPE |
|---|---|---|
| Base | $5,593.50 | $7,038.90 |
| First additional | $1,130.00 | $1,422.00 |
| Second additional (CPP2) | $0.00 | $832.00 |
| Total CPP payable | $6,723.50 | $9,292.90 |
| Tax treatment | $60,000 net income | At or above the YAMPE |
|---|---|---|
| Deducted: the other half of the base | $2,796.75 | $3,519.45 |
| Deducted: first additional | $1,130.00 | $1,422.00 |
| Deducted: second additional (CPP2) | $0.00 | $832.00 |
| Total deducted from income | $3,926.75 | $5,773.45 |
| Claimed as a credit: half of the base | $2,796.75 | $3,519.45 |
At $60,000 there are no CPP2 contributions because the income is below the YMPE ($74,600).
The CPP contribution rates page has the rates and maximums for earlier years.
GST/HST and incorporation
GST/HST is separate from income tax: 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. GST/HST on freelance income covers registering, charging and filing.
Once net income is more than you need to live on, some self-employed people look at incorporating, which changes how the business income is taxed. Should you incorporate your side hustle? works through the trade-offs, and business structures in Canada compares the options.
Related pages
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: CPP contribution rates, maximums and exemptions
- Canada Revenue Agency: Second additional CPP (CPP2) contribution rates and maximums
- Canada Revenue Agency: Sole proprietorships and partnerships
- Canada Revenue Agency: The Canada Pension Plan enhancement
- Canada Revenue Agency: Line 31000 - Base CPP or QPP contributions on self-employment income and other earnings
- Canada Revenue Agency: When to register for and start charging the GST/HST
- Government of Canada: Canada Pension Plan Contributions and Overpayment