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Independent contractor taxes in Canada run on a fixed calendar: instalments on March 15, June 15, September 15 and December 15, payment by April 30, return by June 15 (2027 for the 2026 tax year). On $60,000 of net business income in Ontario, set aside about $14,603 a year, or $1,217 a month.
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. The CRA has not posted 2026 tax year dates yet, but the usual pattern gives June 15, 2027 to file and April 30, 2027 to pay. 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.
Our guide to self-employed taxes covers the rest of the year. 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, and see our page on contractor or employee rules for the usual tests. 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.
Official pages on this topic: Canada Revenue Agency: Completing Form T2125 and Canada Revenue Agency: Business expenses.
What this page is based on
The 2026 tax year deadlines, instalment thresholds, base CPP figures and the GST/HST small supplier test are from Canada Revenue Agency pages, read in November 2026. The six-year record rule is from CRA pages read in September 2026, and the 8% rate on earnings from $74,600 to $85,000 comes from this site’s CPP page. 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, any balance owing is due April 30 and the return is due June 15 if you carry on a business. The CRA has not posted 2026 tax year dates yet; the usual pattern gives April 30, 2027 and June 15, 2027. The payment date does not move, so a balance still unpaid after April 30 is late even if you file in June.
How much tax on $60,000 of contract income in Ontario?
Our self-employed tax calculator shows $7,879.42 of income tax ($5,155.43 federal and $2,723.99 Ontario) and $6,723.50 of CPP for both halves, $14,602.92 in all. That leaves $45,397.08. The figure leaves out EI, GST/HST and business costs, so enter your net income after expenses, not your invoices.
When do I have to pay instalments?
Generally 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 lowers the figure to $1,800 for Quebec residents. The usual dates are March 15, June 15, September 15 and December 15, and the tax instalments calculator shows how to split the amount.
When must a contractor register for GST/HST?
You are a small supplier while taxable revenue stays at $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters. Once you go past $30,000 you must register within 29 days, and you charge the tax from the sale that took you over. You can also register earlier by choice.
Am I a contractor or an employee?
If you invoice one payer full time, on their hours and with their tools, the CRA may see an employee, and the payer would owe deductions it did not take. The CRA weighs several things together, such as control, tools, a substitute and financial risk. Read its guidance before you register a business.
- 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