Self-employed tax calculator
You pay both halves of the CPP at 11.90%. Half the base rate comes back as a credit and the rest as a deduction, so the real gap against being employed is a fraction of what the doubled contribution suggests.
Written and edited by Pablo Ruiz QuinteroSources checked September 1, 2026Method and rates read off the CRA on 2026-09-08After business expenses, not what you invoiced.
27.2% of net income · $2,360 more than the same money as an employee
| Net self-employment income | $85,000.00 |
| Income tax | − $13,847.47 |
| CPP, both halves | − $9,292.90 |
| You keep | $61,859.63 |
$5,773 of those contributions is deducted from taxable income and $3,519 gives a credit at the lowest rate — which is why the gap against an employee is $2,360 and not the full doubled contribution.
You pay both halves of the CPP — and get most of one back
An employee contributes 5.95% and their employer contributes 5.95%. Self-employed, you are both, so you contribute 11.90% — up to $8,460.90 instead of $4,230.45. CPP2 doubles the same way, 8.00% to a maximum of $832.
That is where "self-employment costs you double" comes from, and it stops half way through the sentence. The tax system splits the contribution three ways:
Half the base rate — 4.95% — is a non-refundable credit, exactly as it is for an employee.
The other half of the base rate is a deduction from your income. That is the employer's half, and you deduct it because you paid it as an employer would.
The 2% enhancement and all of CPP2 are deductions too.
On $85,000 of net self-employment income in Ontario: $9,293 of contributions, of which $5,773 comes off your taxable income and $3,519 gives a credit. The extra cost against being employed on the same money is $2,360, not the $4,646 the doubled contribution suggests.
And it costs you most in the middle, not at the top
Because the CPP ceiling is fixed, the extra burden of self-employment stops growing once you pass it — while your income keeps going. As a result the penalty peaks around the ceiling and then fades:
$45,000 — $9,611 against $8,206 employed. $1,405 more, 3.1% of income.
$85,000 — $23,140 against $20,781. $2,360 more, 2.8%.
$150,000 — $46,892 against $45,140. $1,752 more, 1.2%.
So the incorporation conversation that usually starts at high income is, on CPP alone, least urgent there. What changes at high income is the corporate rate and the ability to leave money in the company — a different argument, and not this one.
You pay no EI at all, unless you ask to
Self-employment carries no EI premium by default, and most people never learn that they can opt in. You can: registering for EI special benefits gets you maternity, parental, sickness, compassionate care and family caregiver benefits — not regular unemployment benefits, which stay closed to the self-employed.
Three things make the decision. You pay the employee rate only — 1.63%, to a maximum of $1,123.07 — with no employer half, so it is the cheapest EI in the country. The agreement must be in place 12 months before you can claim, so it cannot be joined once you need it. And you file a Schedule 13 with your return each year to pay it.
On $85,000 in Ontario opting in takes your total from $23,140 to $24,049 — $909 a year. Whether that is worth it turns almost entirely on whether a parental leave is plausible in the next few years, since that is the benefit with the largest payout.
Where the same $85,000 of self-employment income costs least
Same net income, same contributions, 13 different provincial schedules:
1. Nunavut — $21,879 total, $63,121 kept.
2. Northwest Territories — $23,035 total, $61,965 kept.
3. British Columbia — $23,040 total, $61,960 kept.
4. Ontario — $23,140 total, $61,860 kept.
5. Yukon — $23,265 total, $61,735 kept.
6. Alberta — $23,530 total, $61,470 kept.
7. Saskatchewan — $25,237 total, $59,763 kept.
8. New Brunswick — $26,003 total, $58,997 kept.
9. Manitoba — $26,024 total, $58,976 kept.
10. Newfoundland and Labrador — $26,386 total, $58,614 kept.
11. Quebec — $26,533 total, $58,467 kept.
12. Prince Edward Island — $26,919 total, $58,081 kept.
13. Nova Scotia — $27,808 total, $57,192 kept.
The spread is $5,929 on identical income, and it is entirely provincial income tax — the CPP half is federal and identical everywhere except Quebec, which runs the QPP instead.
Two things this figure is not
It is not tax on what you invoiced. Enter net income — revenue minus business expenses. Home office, vehicle, equipment, professional fees, a share of your phone and internet: all of it comes out before this calculation starts, and it usually moves the number more than any tax planning does.
It does not include GST/HST. Once your revenue passes $30,000 over four consecutive quarters you must register, charge it to clients and remit it. It is not a cost to you — you collect it — but registration is an obligation with a deadline, and missing it means owing tax you never charged. The sales tax calculator has the rate for each province.
And you pay in instalments rather than at year end once your net tax owing passes the CRA's threshold two years running — quarterly, on the 15th of March, June, September and December.
Where these figures come from
Read off the CRA's own documents, with the date each was read:
CRA — T4127 Payroll Deductions Formulas, 122nd edition (the bonus method, and the $5,000 note on annual taxable income) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jan/t4127-jan-payroll-deductions-formulas-computer-programs.html
CRA — T4127 Payroll Deductions Formulas, 123rd edition (the CPP base rate cut announced for 1 January 2027) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jul/t4127-jul-payroll-deductions-formulas.html
CRA — CPP contribution rates, maximums and exemptions (the self-employed rate and maximum) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/cpp-contribution-rates-maximums-exemptions.html
CRA — Second additional CPP contribution (CPP2) rates and maximums — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/calculating-deductions/making-deductions/second-additional-cpp-contribution-rates-maximums.html
CRA — EI premium rates and maximums, including the 1.4 employer multiplier — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html
CRA — The Canada Pension Plan enhancement: what it means for the self-employed (the credit and deduction split) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/news/2023/05/the-canada-pension-plan-enhancement--businesses-individuals-and-self-employed-what-it-means-for-you.html
Service Canada — EI special benefits for self-employed people: premiums — read 2026-09-08. https://www.canada.ca/en/services/benefits/ei/ei-self-employed-workers/premiums.html
And what is not covered:
— Business expenses are not deducted. A self-employed figure here is tax on net income after expenses, so enter what is left once your costs are out — not what you invoiced.
— Employer payroll taxes beyond CPP and EI are not included. Ontario's Employer Health Tax, British Columbia's employer health tax, Manitoba's Health and Post-Secondary Education Tax and Newfoundland's payroll tax all fall on the employer above their own thresholds, and each is set by its province.
— Quebec's employer QPIP contribution and its other employer contributions are not included in the employer cost, because Revenu Québec publishes them separately and they have not been read here.
— The bonus figure is the withholding your employer takes, which is the CRA method. It is not necessarily your final tax on that bonus: that is settled on your return, where every credit you are entitled to applies.
— GST/HST on self-employment income is not modelled. Registration is required once revenue passes $30,000 in four consecutive quarters, and the tax is collected from clients rather than paid out of income.
Where to go next
Questions
- How much tax do I pay as a self-employed person in Canada?
- On $85,000 of net income in Ontario, $23,140 — $13,847 income tax plus $9,293 of CPP. That is $2,360 more than an employee on the same money, once the deduction and credit on the contributions are applied.
- Do self-employed people really pay double CPP?
- You contribute at 11.90% rather than 5.95%, so the contribution doubles. The cost does not. Half the base rate is a credit and the rest — the employer half, the enhancement and all of CPP2 — is deducted from taxable income, which on $85,000 brings the real gap down to $2,360.
- Do self-employed people pay EI in Canada?
- Not unless you register. Opting in gives access to EI special benefits — maternity, parental, sickness, compassionate care — but never regular unemployment benefits. You pay the employee rate only (1.63%, maximum $1,123.07), and the agreement must be 12 months old before you can claim. On $85,000 it costs $909 a year.
- When do I have to register for GST/HST?
- Once your revenue exceeds $30,000 over four consecutive calendar quarters. Below that you are a small supplier and need not charge it. The tax is collected from clients rather than paid from your income, but registering late means owing tax you never charged.
- Should I incorporate?
- Not on CPP grounds — that gap is $2,360 at $85,000 and narrows as income rises past the contribution ceiling. The arguments that do move are the corporate rate on income left inside the company and the flexibility of paying yourself in salary or dividends, and both depend on whether you need the money now.
- Is this tax on what I invoiced?
- No — on net income, after business expenses. Deduct your costs first and enter what is left; for most self-employed people that reduces the bill by more than any other decision on this page.