Self-Employed Tax Calculator (Canada)

Why "self-employed pays double CPP" is only half true

An employee's CPP contribution is split cleanly in two: they pay one half (the "employee" share) straight off their paycheque, and their employer quietly pays a matching half that never touches the employee's income or tax return. When you're self-employed, there's no employer to pay that second half — you owe both, which is exactly where "self-employed pay double CPP" comes from. On the base-plus-first-additional band (up to the $74,600 Year's Maximum Pensionable Earnings for 2026) that's 11.90% combined instead of an employee's 5.95%, and on the CPP2 band (from $74,600 to $85,000) it's 8% combined instead of 4%. But CRA's Schedule 8 doesn't tax that extra half the same way it taxes the first: half of your base contribution becomes a non-refundable tax credit (line 31000, worth 14 cents on the dollar — the same dollar amount, coincidentally, as what an employee's own base CPP credit would be at identical income), while the "employer-equivalent" half plus the entire enhanced and CPP2 portions become a deduction from your taxable income (line 22200) — a larger tax break than an employee gets, because an employee only ever deducts their much smaller enhanced-CPP layer. The two effects partially offset each other, which is why the real, after-tax gap between a self-employed person and an equally-paid employee is meaningfully smaller than "you pay exactly twice as much" implies — see the worked example below for the actual numbers.

What counts as "net self-employment income" here

Enter the number that actually lands on your T1 — gross revenue minus your deductible business expenses (supplies, home-office costs, vehicle use, subcontractors, and so on) — not what clients paid you before those costs. CPP, EI, QPIP and income tax are all calculated on that net figure, exactly as CRA calculates them. With employment income entered, income tax, CPP (QPP and QPIP in Quebec) and EI also take the job into account, as the next section explains. This calculator doesn't help you figure out which expenses are deductible; it starts from the number your bookkeeping already produces.

If you also have a job

Enter the employment income from your T4 and the calculator shows only what the business income adds on top of the job. Income tax is worked out on the job and the business together and the income tax on the job alone is taken off, so the business income is taxed on top of your pay, not from the bottom of the brackets. The tax on the job itself is what the Take-Home Pay Calculator shows for the same amount with no RRSP contribution.

Outside Quebec, CPP follows CRA's Schedule 8 for someone who has both kinds of income. The job's CPP has already used part of the year's limits, so the business pays on what is left: the $3,500 basic exemption is used once, base and first additional contributions (11.9% for a self-employed person, both halves) apply to what remains below the $74,600 first ceiling, and second additional contributions (8%) to what remains between $74,600 and $85,000. The deduction on line 22200 and the credit on line 31000 are worked out on the contributions on the business income alone, as they are without a job; the job's own CPP is a credit on line 30800 and its enhanced part a deduction on line 22215, and the combined income tax counts both.

EI, if you opt in, is worked out on what the job left of the maximum insurable earnings, in every province. The self-employment premium is the year's rate on the lesser of your net self-employment earnings and the maximum insurable earnings less your insurable earnings from employment, never below nothing (Employment Insurance Act, s. 152.21(2); Schedule 13, lines 5 to 8). At the 2026 maximum of $68,900, a job that pays $68,900 or more leaves no EI to pay on the business income. The premium on the business income is a credit on line 31217 (and, outside Quebec, the same amount on line 58305 of the provincial form), and the EI your job already paid is a credit too, so the combined income tax counts both.

The job is entered as one yearly amount, and the page takes the whole of it as the pensionable earnings in box 26 and, up to the maximum insurable earnings, as the insurable earnings in box 24 of your T4, where Schedule 8 starts from box 26 (box 14 only when box 26 is blank) and Schedule 13 from box 24 (box 14 only when box 24 is blank). It also takes the CPP on your T4 slips to be what that pay calls for. With more than one employer the slips can show less (CRA's page for line 22200 names this case), and Schedule 8 then leaves the business more room, so its CPP can be higher than shown. It enters no CPP overpayment, and it does not model a T4 that shows QPP contributions, for which CRA has you use Form RC381 instead of Schedule 8.

In Quebec the same job box works from Revenu Québec's schedules. QPP on the business income is Part C of Schedule U (lines 445 and 248 of the Quebec return). Under sections 53, 53.1 and 53.2 of the QPP Act (R-9) a self-employed worker's contributions are limited by the salary and wages on which contributions were already made, so the business gets the room the job left: the $3,500 exemption is used once, base and first additional contributions (12.6% for a self-employed person, both halves) apply to what remains below the $74,600 first ceiling, and second additional contributions (8%) to what remains between $74,600 and $85,000. The page works that out as the QPP of the job and the business together less the QPP of the job alone, both halves, and its test file runs Part C line by line, with the 2025 figures the form prints, against that method over a grid of jobs and business incomes without finding a difference. Schedule U for 2026 is not published, so the page uses the 2026 rates and ceilings Revenu Québec states in its place. The deduction on line 248 (Schedule U, lines 101 to 124) is half of the base contribution on the business plus all of its first and second additional contributions, together with the job's own enhanced contributions.

QPIP on the business income is Schedule R, Part A: 0.764% of the lesser of the net business income and the $103,000 maximum insurable earnings less the insurable earnings of your RL-1 slips, and no premium at all when the business and employment income together are under $2,000. The page takes the whole job as insurable for QPIP and splits the premium as it does without a job: the employee-rate share (0.430% of the earnings charged) is a credit, and the rest is deducted from income. Quebec income tax is then worked out on the job and the business together, less the income tax on the job alone, with one deduction for workers (6% of the job and business together, up to $1,450) and the job's own contributions counted the way the Take-Home Pay Calculator counts an employee's.

As with CPP, the page takes the QPP on your RL-1 slips to be what the job's pay calls for. Part C starts from the contributions actually deducted (its lines 34 and 35), so with more than one employer the slips can show less and Part C then leaves the business more room, and the QPP can be higher than shown. The page does not model a job outside Quebec: for CPP amounts on lines 96 to 96.2 of the Quebec return, Revenu Québec has you use form LE-35-V instead of Schedule U, and Schedule R has a Part B for employment outside Quebec.

Worked example: an Ontario resident with a $60,000 T4 job and $30,000 of net business income, no RRSP contribution, and not opted into EI:

• Room left for CPP: the job used $56,500 of the $71,100 that carries base and first additional contributions (its $60,000 less the $3,500 exemption), so $14,600 is left, and it never reached the $10,400 second additional band, so all of that is left. The last $5,000 of the business income is above $85,000 and carries no CPP.
• CPP, both halves: $2,569.40 ($14,600 × 11.9% = $1,737.40, plus $10,400 × 8% = $832.00). $722.70 of it is claimed as a credit (line 31000, worth $101.18 at 14%) and the remaining $1,846.70 is deducted from taxable income (line 22200).
• Income tax the business adds: $5,670.25 federal and $2,689.53 Ontario, because the $30,000 sits on top of $60,000 of pay (the job's own income tax, $8,320.50, is left out of these figures).
• What you keep: $19,070.82, or 63.6% of the $30,000. Without the job, the same $30,000 shows $3,153.50 of CPP, $1,455.23 of federal and $999.80 of Ontario income tax, and $24,391.47 kept.

With EI ticked, the same Ontario example charges 1.63% of $8,900 (what the $60,000 job leaves of the $68,900 maximum insurable earnings), which is $145.07, and not 1.63% of the $30,000, which would be $489.00.

Worked example, Quebec: a $65,000 job (box A of the RL-1) and $30,000 of net business income, no RRSP contribution, and not opted into EI:

• QPP, both halves: $2,041.60. The job used $61,500 of the $71,100 that carries base and first additional contributions (its $65,000 less the $3,500 exemption), so $9,600 is left, and it never reached the $10,400 second additional band, so all of that is left: $9,600 × 12.6% = $1,209.60, plus $10,400 × 8% = $832.00. $1,532.80 of it is deducted from income and $508.80 is claimed as a federal credit.
• QPIP: $229.20, 0.764% of the $30,000, because the $65,000 job leaves $38,000 of the $103,000 maximum insurable earnings, which covers it.
• Income tax the business adds: $4,781.16 federal (after the Quebec abatement) and $5,389.73 Quebec, because the $30,000 sits on top of $65,000 of pay (the job's own income tax, $11,820.69, is left out of these figures).
• What you keep: $17,558.31, or 58.5% of the $30,000. Without the job, the same $30,000 in Quebec shows $3,339.00 of QPP, $1,166.64 of federal and $1,058.86 of Quebec income tax, and $24,206.30 kept.

EI is optional — QPIP in Quebec is not

A self-employed person who is a Canadian citizen or permanent resident, and who runs their own business or controls more than 40% of a corporation's voting shares, can voluntarily opt into EI by entering into an agreement with the Canada Employment Insurance Commission through My Service Canada Account; the agreement has to be in force for at least 12 months before any special benefit can be paid. You then pay only the employee-equivalent premium (1.63% of net income for 2026, capped at $68,900 of insurable earnings, for a maximum premium of $1,123.07 — 1.30% and a $895.70 maximum in Quebec) with no employer-equivalent share to match. It buys access to EI's special benefits only — maternity, parental, sickness, compassionate care and family caregiver leave — never regular benefits for lost work, and once you have received a payment you can't opt back out while you remain self-employed. For example, a $50,000 net-income earner in Alberta who opts in pays $815.00 in premiums for the year. If you also have a job, the $68,900 is shared with it: see "If you also have a job" above. In Quebec, the calculation is different: QPIP (the Quebec Parental Insurance Plan) is mandatory, not optional — 0.764% of net income for 2026, up to $103,000 of insurable earnings, with no premium at all when your net business income (together with any employment income) is under $2,000, covering maternity, paternity, parental and adoption leave. Because QPIP already covers that ground, a Quebec resident who also opts into EI only gains the other special benefits — sickness, compassionate care and family caregiver leave — at Quebec's own lower EI rate.

Quarterly instalments — the tax nobody withholds for you

A T4 employee has tax, CPP and EI (and, in the Northwest Territories and Nunavut, a 2% payroll tax) taken off every paycheque automatically. Self-employment income has nothing withheld at all, which is exactly why CRA requires quarterly instalments once your net tax owing exceeds $3,000 for the year ($1,800 if you live in Quebec) — and that was also true in 2025 or 2024. Net tax owing is income tax alone: CRA's calculation chart for 2026 says CPP and EI payable are not used to work it out, but must be added when working out how much the instalments have to cover. So this calculator's instalment note tests your estimated federal tax plus provincial tax, without CPP or EI, against $3,000. In Quebec the note shows two separate tests of $1,800 each: CRA's, on federal tax after the Quebec abatement (the refundable abatement is among the credits in CRA's chart, line 44000), and Revenu Québec's, on Quebec income tax. Both tests also take off refundable credits (CRA's chart lists the Canada workers benefit among them), which this calculator does not model, so at lower incomes your real figure can be under the line when the note says it is over. It can't see your 2025 or 2024 returns either, so treat it as a first check, not a final answer. With employment income entered, the note tests only the income tax your business income adds on top of the job, taking the tax your employer withholds to equal the income tax on the job itself (in Quebec, each of the two tests does). One more registration threshold worth knowing about while you're planning cash flow: once your gross self-employment revenue — before expenses, not the net figure this calculator uses — passes $30,000 over four consecutive calendar quarters, you have to register for a GST/HST account and start charging and remitting it (a self-employed taxi or commercial ride-sharing driver has to register even below $30,000). That's a completely separate tax from anything else on this page, and Quebec's QST has its own rules, which this page does not cover; see our GST/HST Calculator for what registration actually changes about your pricing.

Worked example — $80,000 net self-employment income, Ontario

An Ontario resident with $80,000 in net self-employment income, no RRSP contribution, and not opted into EI:

• CPP, both halves: $8,892.90 — $3,519.45 of that is claimed as a credit (line 31000, worth $492.72 at 14%), and the remaining $5,373.45 is deducted from taxable income (line 22200).
• Taxable income: $80,000 − $5,373.45 = $74,626.55 (no Canada Employment Amount — line 31260 is explicitly restricted to employment income).
• Federal tax: $8,698.44. Ontario tax: $4,535.12 (including the flat $750 Ontario Health Premium at this income band).
• What you keep: $57,873.53 — 72.3% of the $80,000 (the three lines above add to $57,873.54; like every total on this page, it's computed from unrounded amounts and rounded independently, so it can land a cent from a manual re-sum of the displayed lines).

The same $80,000, as a T4 employee instead

An employee earning an identical $80,000 gross salary in Ontario pays only $4,446.45 in CPP — exactly half the self-employed total, because their employer silently funds the other $4,446.45 — gets the $1,501 Canada Employment Amount their self-employed counterpart doesn't, and has no equivalent to the bigger CPP-linked deduction, so their combined federal-plus-provincial tax bill actually comes out $894.29 higher than the self-employed person's ($14,127.85 vs. $13,233.57, as the calculator rounds each total). They also have no choice about EI: it's mandatory, at $1,123.07 for this income. Add it all up and this employee keeps $60,302.63 — $2,429.09 more than the self-employed person above (subtracting the two displayed totals actually gives $2,429.10; again, each total here is rounded independently rather than summed from the rounded lines above it), even though the self-employed person pays less income tax, because the extra $4,446.45 of CPP outweighs both that tax saving and the EI premium they chose to skip. To the cent: +$4,446.45 for the employer half of CPP, −$1,123.07 for the EI only the employee pays, −$894.29 for the income tax the self-employed person saves. If the self-employed person in this example had also opted into EI (matching the employee's mandatory premium), the gap widens to about $3,338 — at that point the employer's CPP half and the lost Canada Employment Amount really are the whole remaining story.

The same comparison in Quebec

At the same $80,000, a Quebec self-employed person pays $9,390.60 in QPP (both halves — Quebec’s 2026 rate is 6.30% per side, 12.60% combined, plus 8% on the QPP2 band) and a mandatory $611.20 in QPIP — 0.764% of net income, the self-employed rate, not the smaller 0.430% an employee alone pays. QPIP gets its own split on the return, per CRA’s Schedule 10: the employee-rate share ($344.00 here, exactly what an employee at this income pays) is a 14% credit on line 31215, and the remaining $267.20 (43.7%, the employer-equivalent share) is deducted from taxable income on line 22300 — and again from Quebec taxable income through line 248. Federal tax comes to $7,105.56 and Quebec tax to $8,434.97, so this person keeps $54,457.67 before one contribution this page does not model: Quebec’s health services fund contribution (Revenu Québec’s Schedule F), 1% of income other than employment income above a threshold, which a self-employed person pays on business income and an employee does not pay on salary. On the 2026 thresholds Finances Québec published in November 2025 ($18,500 and $64,355; the 2026 schedule itself is not out yet, so the 1% and the $150 step are those of the 2025 schedule) it comes to about $248 on this example’s $74,110.50 of income subject to the contribution (net income less the QPP and QPIP deductions), so what this person really keeps is lower by that amount and the gap below is wider by the same. An equivalent Quebec employee — $4,695.30 in QPP, $895.70 in EI at the Quebec-reduced rate, and only $344.00 in QPIP (their employer separately funds a further 0.602%) — keeps $57,012.32, a $2,554.64 gap before that contribution. Leaving the contribution aside, the gap breaks down to the cent: +$4,695.30 for the employer half of QPP, −$895.70 for the EI the employee pays and the self-employed person skipped, +$267.20 of extra QPIP, −$1,512.16 of income tax saved through the bigger QPP- and QPIP-linked deductions. Quebec’s own “deduction for workers” (6% of eligible work income, which includes net business income, capped at $1,450) applies on top for both. Revenu Québec’s Schedule U (QPP) and Schedule R (QPIP), in their 2025 editions of December 2025, were read line by line and confirm this treatment: the self-employment QPP deduction is half of the base contribution plus all of the first and second additional contributions, and the QPIP deduction is 43.736% of the premium. The 2026 editions are not published until early 2027, so the page applies the same construction at 2026 rates — see the audit trail below.

Contributing to an RRSP

An RRSP contribution comes off your taxable income exactly the same way whether you're an employee or self-employed. Using the $80,000 Ontario example above, a $6,000 contribution drops the combined federal-plus-provincial tax bill from $13,233.57 to $11,304.57 — a $1,929 saving, more than a flat marginal rate on $6,000 alone would suggest, because it also drops Ontario's taxable income into a lower Health Premium band. RRSP contribution room is based on 18% of last year's actual earned income (capped at the annual dollar limit, $33,810 for 2026) — this calculator approximates that as 18% of the net self-employment income you enter (a job's pay counts toward earned income too, which the box leaves out), since it has no visibility into your prior-year return.

What this doesn't model

This calculator starts from net self-employment income, so it has nothing to say about which expenses are deductible or how to calculate them, and it doesn't calculate, collect or remit GST/HST. Apart from the one employment income figure you can enter, it assumes this is your only income for the year; it doesn't track a part-year change between employment and self-employment, doesn't model business-use-of-home or vehicle logs, and its RRSP room is an approximation rather than your real carried-forward number from CRA's My Account. Ontario's Health Premium is included, but Quebec's health services fund contribution is not: a self-employed Quebec resident pays it on business income and an employee does not, so the Quebec comparison understates the employee's lead (see the Quebec example). No other provincial health levy is modelled. What the employment income box leaves out is listed under "If you also have a job" above. See the FAQ below for EI, QPIP and the instalment tests specifically.

FAQ

This page is general information based on published 2026 CRA and Revenu Québec figures, not tax or financial advice. Your actual return depends on deductions, credits and circumstances this calculator doesn't see — talk to a licensed accountant about your specific situation.