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Work for yourself in Canada and the tax system treats you as the boss and the worker at once. On $60,000 of net business income in Ontario, the 2026 estimate is $7,879.42 in income tax and $6,723.50 in CPP, which leaves you $45,397.08. An employee on the same $60,000 pays CPP and EI of $4,339.75, so working for yourself costs more.
What do self employed people pay tax on?
Your net income: what you earned minus what the business spent. You report it on Form T2125, and the CRA points to guide T4002 for the rules on what you can deduct. Everything counts, including gig work, freelancing, content creation, ride-sharing, marketplace sales, and gifts or tips paid through online platforms. The CRA’s page on sole proprietorships and partnerships lists where each kind of self-employment income goes on your return.
Nobody withholds anything along the way, so the bill arrives all at once. That’s the part that catches people. Picture Priya, a freelance designer in Hamilton, who has a great year, spends every cheque as it lands, and opens her return in April to a number she can’t cover. You can see it coming, so plan for it.
How much tax comes off $30,000, $60,000 or $100,000?
These are Ontario numbers for 2026 from the self-employed tax calculator. They assume the amount is profit after expenses.
| Net business income | Income tax | CPP, both halves | Total | Share taken |
|---|---|---|---|---|
| $30,000 | $2,455.03 | $3,153.50 | $5,608.53 | 18.7% |
| $60,000 | $7,879.42 | $6,723.50 | $14,602.92 | 24.3% |
| $100,000 | $19,044.97 | $9,292.90 | $28,337.87 | 28.3% |
The CPP column looks big because you pay the employee and the employer half. The calculator doesn’t add EI, which self-employed people can only join by choice, and it doesn’t add GST/HST.
When do you have to file and pay?
For the 2025 return the filing date was 15 June 2026. The tax owing was still due on 30 April 2026, so a payment made in June was already late. Your spouse or common-law partner gets the same June date if you’re the one with the business.
The CRA hadn’t published dates for the 2026 return when we last looked. Check its dates page in the new year.
Instalments come next. You may have to pay them if your net tax owing is over $3,000 for 2026 and was in 2025 or 2024 as well, on 15 March, 15 June, 15 September and 15 December. Try the tax instalments calculator to see four equal payments. It isn’t the only method the CRA allows, and it may not be the cheapest for you.
How much should you set aside from each payment?
Use the table as a ballpark. On $60,000 of profit the combined bill is $14,602.92, which works out to about $1,217 a month, or roughly a quarter of every dollar you bring in. A simple habit: when a client pays, move a quarter into a separate savings account before you touch the rest. Sort out the exact figure at tax time, and keep whatever is left over.
Two cautions. The percentage climbs as profit climbs, so a strong year needs a bigger share than a slow one. And the figure assumes profit, not sales. If you billed $60,000 but spent $15,000 on the business, your profit is $45,000 and the bill is smaller.
Can you cut the bill?
Expenses come first, and they only help if you can back them up. The CRA says to keep all receipts, invoices and supporting documents, and its general rule is six years.
An RRSP contribution is the other lever. Put $5,000 in on the $60,000 example and the estimate drops to $6,837.45 of income tax, a saving of $1,041.97. CPP stays at $6,723.50, because it’s worked out on the business income and not on your taxable income. The RRSP calculator shows what that money does over time.
Mistakes and limits
Spending your income as it arrives is the classic one. Set a share aside from every payment, as above.
Also watch GST/HST. The CRA says you must register once taxable supplies pass $30,000 in a single calendar quarter or over four quarters in a row. Commercial ride-share drivers register as soon as they earn revenue.
The estimate is only that. It skips EI, GST/HST, business expenses, the home office and the many claims on the T2125. If you’re comparing self-employment with a job, use the take-home pay calculator for the employee side. For a first year, the CRA’s Liaison Officer service can walk you through bookkeeping and common errors, and it’s confidential. And if you plan to incorporate, read our note on bootstrapping a business in Canada.
Do self employed people pay into EI?
Not unless they sign up. Employees pay EI automatically through payroll. A self-employed person can register for EI special benefits, such as maternity, parental, sickness and compassionate care, but it’s a choice, which is why the table leaves EI out. If you’re weighing whether to register, compare the cost against the benefits on the CRA’s page.
Where we got these figures
Rates and brackets are the 2026 federal and Ontario figures on the Canada Revenue Agency‘s rates page. The filing and payment dates, the $30,000 GST/HST threshold, the record advice and the instalment rules come from CRA pages read on 30 September 2026. CPP figures are the 2026 limits in our calculator. This is an independent guide, separate from any government body.
Frequently asked questions
How much tax does a self employed person pay on $60,000 in Ontario?
The 2026 estimate is $7,879.42 in income tax and $6,723.50 in CPP for both halves, so $14,602.92 in total. EI and GST/HST aren't included.
When are self employed taxes due?
For the 2025 return, filing was due 15 June 2026 and any balance was due 30 April 2026. We couldn't find 2026 return dates yet.
Do I pay both halves of CPP when I work for myself?
Yes. You pay the employee and the employer share, which is why the CPP figure is higher than on a pay stub.
When do I need to register for GST/HST?
The CRA says once taxable supplies pass $30,000 in a single calendar quarter or over four consecutive quarters. Commercial ride-share drivers register right away.
Will an RRSP contribution lower my CPP?
No. In our estimate a $5,000 contribution cuts income tax by $1,041.97 on $60,000 and leaves CPP unchanged.
- 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