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. This calculator doesn't help you figure out which expenses are deductible; it starts from the number your bookkeeping already produces.

EI is optional — QPIP in Quebec is not

Every self-employed person in Canada can voluntarily opt into EI through Service Canada, paying 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 claim 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. 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, 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 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 at least one of the two previous tax years. This calculator's instalment note compares an estimate of your federal tax, provincial tax and CPP contribution for the year you enter against that threshold; it can't see your 2024 or 2025 returns, so treat it as a first check, not a final answer. 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. That's a completely separate tax from anything else on this page; 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 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, 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. 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. 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. One caveat: Revenu Québec’s line 248 help confirms both the QPP (Schedule U) and QPIP (Schedule R) deductions exist on the Quebec return, but neither Quebec schedule was read line-by-line, so their amounts are applied by analogy to the federal forms — 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 income you enter, 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. It assumes this is your only income for the year, 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. Provincial health premiums beyond Ontario's are not modelled. See the FAQ below for EI, QPIP and the instalment threshold 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.