About the Canada Self-Employed Tax Calculator
This calculator estimates what a self-employed Canadian — a sole proprietor, freelancer, contractor or gig worker — owes for the 2026 tax year on net business income. Self-employed people pay both the employee and employer shares of Canada Pension Plan contributions, so on top of federal and provincial income tax you pay 11.9% CPP on earnings between $3,500 and $74,600, plus 8% CPP2 on earnings up to $85,000. Enter your net business income (after expenses), any other income and your RRSP deduction to see the total and the quarterly instalments to set aside.
It uses the 2026 federal brackets with the new 14% lowest rate, the federal basic personal amount of up to $16,452, and the 2026 brackets and basic personal amounts for Ontario, British Columbia and Alberta published by the CRA. The employer half of CPP, the enhanced 1% portion and all CPP2 contributions are deducted from income, and the base employee portion becomes a non-refundable credit, exactly as on Schedule 8 and lines 22200, 22215 and 31000 of the return. Ontario includes the surtax and the Ontario Health Premium.
It is meant for budgeting and instalment planning. It does not include optional EI special-benefit premiums, GST/HST you collect, the Canada employment amount (not available to self-employed people), or low-income reductions such as the Ontario tax reduction and BC tax reduction, which lower tax mainly below about $40,000 of income. Quebec residents pay QPP and file a separate provincial return, so Quebec is not covered.
With the default inputs, the total income tax + cpp is $25,372.87. Change any value above to recalculate instantly.
How to use the canada self-employed tax calculator
- 1Choose the province you lived in on December 31, 2026.
- 2Enter your net self-employment income after business expenses.
- 3Add any other taxable income such as interest or rental profit.
- 4Enter your RRSP or FHSA deduction for the year.
- 5Review income tax, CPP and the quarterly instalment to set aside.
Formula and method
Self-employed CPP is 11.9% (5.95% employee + 5.95% employer) of net self-employment earnings between the $3,500 basic exemption and the $74,600 YMPE, plus CPP2 of 8% on earnings between $74,600 and $85,000. The employer half (5.95%), the enhanced part of the employee half (1%) and all CPP2 are deducted from income; the base employee part (4.95% of pensionable earnings) is claimed as a non-refundable credit.
Taxable income is self-employment and other income minus RRSP/FHSA deductions and the CPP deduction. Federal tax applies the 2026 brackets (14%, 20.5%, 26%, 29%, 33%) and subtracts 14% of the basic personal amount ($16,452, reduced to $14,829 between $181,440 and $258,482 of income) and the CPP credit base. Provincial tax applies the province’s 2026 brackets and subtracts its basic personal amount and the CPP credit at the lowest provincial rate; Ontario adds a surtax (20% of provincial tax over $5,818 plus 36% over $7,446) and the Ontario Health Premium.
- NSE
- Net self-employment earnings (business income minus expenses)
- TI
- Taxable income after RRSP and CPP deductions
- BPA
- Basic personal amount (federal or provincial)
Worked examples
$90,000 net business income in Ontario
CPP is 11.9% of $71,100 ($8,460.90) plus 8% of $10,400 CPP2 ($832), or $9,292.90. Of that, $5,773.45 is deductible, leaving taxable income of $84,226.55. Federal tax after credits is about $10,666 and Ontario tax — including the $750 health premium — about $5,414, for $25,373 in total including CPP.
$60,000 net income in Alberta
Below the YMPE there is no CPP2: CPP is 11.9% × $56,500 = $6,723.50, of which $3,926.75 is deductible. Federal tax is about $5,155 and Alberta tax — with its $22,769 basic personal amount — about $2,441, for $14,320 in total including CPP.
$150,000 in BC with a $20,000 RRSP deduction
CPP is at the 2026 maximum of $9,292.90. The RRSP and CPP deductions bring taxable income to $124,226.55. Federal tax is about $19,261 and BC tax about $8,382, for a total of roughly $36,936 including CPP.
Frequently asked questions
How much CPP does a self-employed person pay in 2026?+
Self-employed people pay both halves: 11.9% of net earnings between $3,500 and $74,600 (maximum $8,460.90) plus 8% CPP2 on earnings between $74,600 and $85,000 (maximum $832), for a combined maximum of $9,292.90 in 2026.
Is self-employed CPP tax deductible?+
Partly. The employer half, the enhanced 1% of the employee half and all CPP2 contributions are deducted from income on lines 22200 and 22215. The base employee portion (4.95%) is claimed as a non-refundable tax credit on line 31000.
Do self-employed people pay EI in Canada?+
Not by default. Self-employed Canadians can opt in to EI special benefits (maternity, parental, sickness and caregiving) by registering with Service Canada, after which they pay the employee premium rate on self-employment earnings.
When do self-employed Canadians pay tax?+
The return is due June 15, but any balance owing must be paid by April 30. If net tax owing is over $3,000 in the current year and either of the two previous years, CRA expects quarterly instalments on March 15, June 15, September 15 and December 15.
What are the 2026 federal tax brackets?+
For 2026: 14% up to $58,523, 20.5% to $117,045, 26% to $181,440, 29% to $258,482 and 33% above. Non-refundable credits such as the basic personal amount are also calculated at 14%.
Can I reduce tax as a sole proprietor?+
Claim all legitimate business expenses (home office, vehicle, equipment via capital cost allowance), contribute to an RRSP or FHSA, and consider timing income. Incorporating can defer tax on profits left in the business, but adds cost and complexity.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.
Sources
- Canada Revenue Agency — Tax rates and income brackets for 2026
- Canada Revenue Agency — CPP contribution rates, maximums and exemptions
- Canada Revenue Agency — Second additional CPP contribution rates and maximums
- Canada Revenue Agency — T4127 Payroll Deductions Formulas, 122nd edition (January 1, 2026)