Side Hustle Tax Calculator: Extra Tax and CPP on Side Income

This calculator answers one question: if you have a job and also earn net income from a side business, how much more income tax and CPP do you owe because of the side income? It compares your tax on the job alone with your tax on the job plus the side income, and adds the CPP the side income triggers. It is part of the self-employed taxes hub. If self-employment is your only income, the self-employed tax calculator fits better; the side hustle taxes guide covers reporting the income.

What the calculator counts

• Net side income. Revenue minus deductible business expenses: the net figure you report on Form T2125 (how to complete Form T2125). Which costs count is covered in self-employed tax deductions.
• Extra income tax. Federal and provincial or territorial tax for the 2026 tax year, first on your employment income alone, then on employment plus side income; the difference is the extra tax. Both runs use the same brackets, basic personal amounts and credits as the site’s income tax calculator, including the Canada employment amount, the CPP and EI credits on your job, and Ontario’s surtax and Health Premium.
• CPP on side income. What you have to pay on self-employment income depends on how much you already contributed as an employee, shown in boxes 16, 16A, 17 and 17A of your T4 slips. The calculator gives your job first claim on the basic exemption and the earnings ceilings, then charges the side income the self-employed CPP rate on whatever room is left (next section).
• Tax treatment of that CPP. Part of it is deducted from income on line 22200 and part earns a non-refundable credit on line 31000, plus the matching provincial or territorial credit on line 58280 of Form 428 (CRA line 31000). The self-employed tax calculator page explains which part goes where; the calculator’s Schedule 8 rows show both amounts.

Left out: Quebec (it has its own pension plan, the QPP, and its own return), more than one employer, partial years (CPP amounts are prorated in the year you turn 18 or 70), credits other than the basic ones (RRSP deductions, the age amount, spouse and dependant amounts), GST/HST, and some provinces’ low-income tax reductions. The figures are an estimate for a single person, not a filed return.

How your job changes the CPP on side income

The basic exemption and the two earnings ceilings apply to your employment and self-employment earnings together, and your job uses them first. Assuming all your employment income is pensionable, for 2026:

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. The CRA’s line 22200 page sets out how a job and self-employment income combine:

• What you have to pay on self-employment income depends on how much you already contributed as an employee, shown in boxes 16, 16A, 17 and 17A of your T4 slips.
• Contributions apply only to earnings between a minimum (the basic exemption) and a maximum (the earnings ceilings), so if your employment earnings already reach a ceiling, nothing more up to that ceiling is due on the side income.
• Self-employment or partnership losses can't reduce the CPP contributions paid on your employment earnings.
• A partner includes only their share of the partnership's net profit.
• Contributions are prorated in a year you turn 18 or 70 or receive a CPP disability pension.
• Outside Quebec, if you contributed to the QPP (or to both the QPP and the CPP), you use Form RC381 instead of Schedule 8.

Side income versus a paycheque

• No tax is withheld. Your employer withholds tax and CPP from your pay, but nobody does that for side income, so the calculator’s “not withheld from your pay” row is paid with your return or through instalments. When the balance is large enough, the CRA can ask for tax instalments; the first-time self-employed guide covers instalments and the filing and payment deadlines.
• No EI premiums. EI premiums come off your employment income, not your side income. Self-employed people can register for EI special benefits (maternity, parental, sickness and caregiving), but must wait 12 months after registering before they can claim. Those who register pay premiums with their yearly return, which the calculator doesn’t include.
• GST/HST is separate. 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. The GST/HST on freelance income guide covers registering, charging and the Quick Method.
• Expenses lower both tax and CPP, since both are worked out on net income. The rules for the bigger categories have their own pages: business use of home and vehicle expenses and the logbook.
• Incorporating changes how the income is taxed altogether; should you incorporate a side hustle compares the two.

Related calculators and guides

• Self-employed taxes hub
• Self-employed tax calculator
• Side hustle taxes in Canada
• Gig worker taxes in Canada
• Income tax calculator
• Marginal tax rate calculator
• Sales tax calculator
• CPP calculator