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Independent contractor taxes in Canada work on a fixed calendar: instalments in March, June, September and December, payment by April 30, and a return by June 15. On $60,000 of net business income in Ontario, expect to hand over about $14,603 in income tax and CPP. That’s roughly $1,217 a month to set aside.
Where does the $14,603 come from?
The self-employed tax calculator gives the split for $60,000 of net income in Ontario. You keep $45,397.08, and 24.3% of your income goes out.
| Item | Amount |
|---|---|
| Federal income tax | $5,155.43 |
| Ontario income tax | $2,723.99 |
| CPP, both halves | $6,723.50 |
| Total | $14,602.92 |
| Left after both | $45,397.08 |
The tool leaves out EI, GST/HST and business costs. Enter your income after expenses, not your invoices. If you also have a salary or rental income, put it in the other-income box, because the two stack.
How much should you move aside each month?
Here’s the simple version. Divide the yearly total by 12: $14,602.92 over 12 months is about $1,217. Say Dana, a freelance editor in Hamilton, invoices $5,000 a month and has about $1,000 of business costs. Her net is $4,000 a month, or $48,000 a year, and she keeps the same habit: a fixed slice of every payment goes into a separate savings account the day the money lands.
A second account sounds fussy, but it’s the cheapest bit of discipline in self-employment. The money in it isn’t yours yet. It belongs to the taxman and the CPP.
What is the yearly calendar for an independent contractor?
Most contractors run on a calendar year. The CRA gives June 15 as the filing date for the self-employed, but the payment date stays April 30. File in June with a balance still unpaid and you’ve missed the payment date. Plenty of people mix the two up.
The instalment dates are March 15, June 15, September 15 and December 15. Instalments are required when your net tax owing is over $3,000 this year and was over $3,000 in at least one of the two years before. The CRA’s page on who has to pay instalments sets the same test, and it lowers the figure to $1,800 for Quebec residents. Try it in the tax instalments calculator. An expected $12,000 owing means four payments of $3,000. At $2,900 in each year, the calculator shows none due.
Instalments aren’t a penalty. They’re the CRA’s way of collecting through the year what an employer would deduct from each cheque. The CRA lets you pay by its own reminder amounts or by last year’s figures, and one of those can cost less if your income changed.
When do you have to register for GST/HST?
You’re a small supplier while your worldwide taxable revenue stays at $30,000 or less in a single calendar quarter and over the last four calendar quarters in a row. Go past $30,000 in a quarter and you stop being one that day. You then have 29 days to register, and you charge the tax from the date of registration, including on the sale that took you over.
Once you’re registered you collect and remit the tax on every invoice. Use the reverse HST calculator if a client quotes a price with tax included.
Which costs can you subtract?
Costs you paid to earn business income reduce the net figure that gets taxed. The CRA expects you to be able to back each one up. Home office, vehicle and supplies come up most often, and each has its own rules on the business share of the cost. Work those out before you enter the net number in any calculator.
Keep records for six years. The CRA counts that from the end of the latest year they relate to, and it applies even if you file online and send no receipts.
Are you really an independent contractor?
This is the question behind all the others. If you invoice one payer full time, on their hours, with their tools, the CRA may see an employee, and the payer would then owe deductions it never took. We aren’t going to list the CRA’s tests here, because they weigh several things together and no single one decides it.
What you can do is ask the plain questions. Can you send a substitute? Do you work for more than one client? Do you carry your own costs and risk? If the honest answers are no, no and no, read the CRA’s guidance on employee versus self-employed before you register a business. Our take-home pay calculator shows what the same income looks like on a payslip.
Mistakes and limits
- Spending the April money. If nobody withholds tax, the bill arrives in one lump.
- Counting gross invoices as net income. The extra tax on income you didn’t keep hurts.
- Waiting for the $30,000 to show up on a year-end summary. The test runs by quarter.
- Forgetting CPP in your budget. For 2026 the base maximum for the self-employed is $8,460.90, with a further 8% on earnings from $74,600 to $85,000.
What this page is based on
Deadlines, instalment rules, the GST/HST small supplier test and the six-year record rule are from Canada Revenue Agency pages, read in September 2026. CPP figures are CRA 2026 tables. Tax amounts come from the 2026 federal and Ontario schedules used by this site’s calculators. We’re an independent site, and no government body is behind it.
Frequently asked questions
When are independent contractor taxes due in Canada?
For a calendar year, payment is due April 30 and the return by June 15, so the balance is due before the filing date.
How much tax on $60,000 of contract income in Ontario?
$7,879.42 in income tax and $6,723.50 in CPP, $14,602.92 in all.
When do I have to pay instalments?
When net tax owing is over $3,000 this year and was over $3,000 in at least one of the last two years.
When must a contractor register for GST/HST?
After revenue passes $30,000 in one calendar quarter, or over four quarters in a row. You then have 29 days to register.
How long should I keep business records?
The CRA says six years from the end of the latest year they relate to.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST