Updated Checked by the Tax-Services.ca editorial team How we check
Self employed tax software has one job: turn your business income and expenses into a T1 return, with the T2125 form filled in. If you’re a sole proprietor, that’s all the CRA needs, and any NETFILE certified program can do it. What you should really look at is how it handles your expenses, your CPP and your GST/HST, because that’s where freelancers lose money or time.
What does a self-employed return actually contain?
A sole proprietor pays tax by reporting income on a personal T1 return. Business income and expenses go on Form T2125, Statement of Business or Professional Activities, and you file one form for each business. The result is your net income, and that number flows into the rest of your return. You can only deduct the business part of an expense, so a phone or a car that you use half for work is half deductible at best.
Any program you pick, and this goes for the free ones as much as the paid ones, should ask you for those pieces in plain order: sales, then expenses, then the business-use share of shared costs. If it hides the T2125 behind a chatty interview and you can’t see the totals, choose another one. You’ll want to see the numbers.
How much does self-employment cost you in tax and CPP?
You pay both halves of CPP on your net income, which surprises people who have only ever seen a pay stub. The 2026 self-employed rate is 11.9% on earnings between $3,500 and the first ceiling of $74,600. We used the self-employed tax calculator with Ontario as the province and no other income.
| Net business income | Income tax | CPP, both halves | Total | Share of income |
|---|---|---|---|---|
| $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% |
At $60,000 you keep $45,397.08. Compare that with the same pay from an employer, where half the CPP is the company’s cost. Run the same income through the income tax calculator as employment income and you’ll see the gap.
What should you check before you buy anything?
We can’t tell you which product is best, and we won’t guess at prices or discounts. They change, and we couldn’t confirm any of them. What we can give you is a short list of questions to put to whatever you’re considering.
- Is it on the CRA’s list of certified NETFILE software for the year you’re filing?
- Does it include T2125 and let you add a second business?
- Can it import last year’s return, so your capital cost allowance carries over?
- Does it show the CPP on self-employment as its own line?
- Can you try it before you pay, and can you print or save a full copy?
The CRA keeps a certified software list on canada.ca. TurboTax is one example of a product that appears there. Whether it suits you is a separate question, and only your own trial run can answer it.
How do you test software with your real numbers?
Don’t judge it on the sign-up screen. Enter a month of real sales and a handful of expenses, then look at what lands on the T2125. Does the business-use share come out right? Can you see CPP as its own line? Is there any way to go back and edit an earlier answer without starting over? Priya, a freelance designer in Vancouver, found that one program wouldn’t let her add a second business, and she spotted it in ten minutes of testing, not after paying.
When do you file, and when do you pay?
Here’s the trap. For the 2025 return, self-employed people had until 15 June 2026 to file, but any balance was still due on 30 April 2026. Pay late and interest starts running from 1 May, even though your return isn’t late. We couldn’t find the dates for the 2026 return yet, so check the CRA’s due dates page before you plan.
If your tax bill is large, instalments may be required during the year. The tax instalments calculator gives a rough schedule, and the CRA sets the final rules.
What can software not tell you?
It can’t tell you whether an expense is allowed. It records the number you type, and the CRA decides later. Keep receipts and a note of the business reason for anything borderline. At $60,000 of net income, the table above shows $14,602.92 of tax and CPP, so even a few missing receipts can add up to real money.
What mistakes cost self-employed people money?
The first is mixing personal and business spending in one account. It turns a ten minute job into an afternoon. The second is forgetting GST/HST. Once your taxable sales pass the $30,000 small supplier threshold you generally have to register (the CRA page sets out how the test works), and the tool above leaves GST/HST out completely. The GST/HST calculator helps with the maths on each invoice.
Third, don’t trust any estimator with deductions you haven’t documented. The calculator lets deductions lower income tax but not CPP, and it doesn’t include EI. It’s a fast check, and it isn’t your return.
Where the numbers come from
CPP rates and limits, tax brackets and filing dates come from the CRA, with Ontario figures from the Government of Ontario, all for 2026 unless we say otherwise. We checked them on 29 September 2026. This site has no link with the CRA or any software maker.
Frequently asked questions
Do I need special software if I'm self-employed?
No. A sole proprietor files a T1 return with Form T2125, and any NETFILE certified program can handle both. What matters is how it treats expenses and CPP.
How much CPP do I pay on $60,000 of self-employment income?
You pay both halves, which is $6,723.50 in 2026. Income tax in Ontario adds $7,879.42.
When is my return due if I'm self-employed?
For the 2025 return it was 15 June 2026, but any balance was still due on 30 April 2026. We couldn't find the dates for the 2026 return yet.
Does the software file my GST/HST return?
Not as part of the T1. GST/HST is a separate return, and the $30,000 small supplier threshold decides whether you must register.
Can I deduct my home office or car?
Only the business-use share of a cost can be deducted. The CRA's T2125 instructions set out what counts, so read them before you enter amounts.
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