Self-Employment Tax Calculator
Calculate your total tax liability as a self-employed Canadian, including both shares of CPP, federal and provincial income tax, and quarterly installment amounts.
Self-Employment Income
Self-Employment Tax Summary
Effective tax rate
Quarterly installment
T4 Salary vs Contract Rate
Compare a salaried job with a contract paying by the hour or by the year, using the province and tax year above (Ontario, 2026).
Health/dental, pension match and similar, valued at what you would pay yourself.
1,920 = 40 hours × 48 weeks. A salary keeps paying through vacation and statutory holidays; a contract does not.
Employee (T4)
Contractor (self-employed)
Break-even hourly rate
At 1,920 billable hours
Break-even contract per year
Nets the same as the salary
Contract nets more by
Per year, after tax and CPP/QPP
GST/HST: quote contract rates before GST/HST. Tax you charge once registered is collected for the CRA and remitted, so it is not income and does not change this comparison.
The contractor side excludes voluntary EI for the self-employed.
How it works: Self-employed Canadians pay both the employee and employer shares of CPP (11.9% combined). The employer-equivalent half of the base CPP rate plus all of the CPP enhancement (including CPP2) is deductible from taxable income; the remaining base-CPP half generates a non-refundable tax credit instead, same as an employee’s own CPP withholding. EI is optional for self-employed individuals and is not included here. CRA requires quarterly tax installments if your net tax owing exceeds $3,000.
Self-Employment Tax in Canada
Self-employed individuals pay both the employee and employer portions of CPP contributions, totaling 11.9% of net self-employment earnings (up to the YMPE). Of the base 9.9% portion, the employer-equivalent half is deductible from income; the other half generates a non-refundable tax credit instead. The CPP enhancement layered on top of the base rate is fully deductible.
CPP2 (Enhanced): An additional 8% (both shares) applies on earnings between the YMPE and the second earnings ceiling, and is fully deductible from income (no credit portion).
Quarterly installments: If your net tax owing exceeds $3,000 in the current year and either of the two previous years, CRA requires you to pay tax in quarterly installments (March 15, June 15, September 15, December 15).
EI: Employment Insurance is optional for self-employed individuals and is not included in this calculation. You can opt in through Service Canada for special benefits.
Frequently asked questions
How much CPP do self-employed Canadians pay?
Self-employed individuals pay both the employee and employer portions of CPP, totaling 11.9% of net self-employment earnings up to the YMPE. Of the base 9.9% portion, the employer-equivalent half is deductible from income and the other half generates a non-refundable tax credit; the CPP enhancement layered on top is fully deductible. CPP2 adds an additional 8% (both shares) on earnings between the YMPE and the second ceiling, fully deductible with no credit portion.
Do self-employed Canadians pay EI?
Employment Insurance is optional for self-employed individuals. You can opt in through Service Canada to access special benefits like maternity, parental, sickness, and compassionate care benefits, but you cannot access regular EI benefits for unemployment.
When do I need to pay quarterly tax installments?
If your net tax owing exceeds $3,000 in the current year and either of the two previous years, the CRA requires quarterly installments due March 15, June 15, September 15, and December 15. Failing to pay on time results in installment interest charges.
Sources
Reflects 2026 tax year rates.
Compare by province
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