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A person in Ontario who earns $65,000 at a job and clears $15,000 of profit on the side ($18,000 of sales less $3,000 of expenses) owes about $5,755 more for 2026: $4,181 of income tax and $1,574 of CPP. That leaves $9,245 of the $15,000, so the side income is taxed at about 38.4% overall (estimate).
The calculator treats side income as self-employment income, the way the CRA treats a business, and stacks it on top of your salary.
How is side income taxed on top of a salary?
Net profit from a side business is added to your salary and taxed at your marginal rate, using the same federal and provincial brackets as the rest of your income. The profit sits on top, so its first dollar is taxed at the rate of the bracket your salary already reached. Nothing is withheld on it, so the bill arrives when you file. The 2026 return is due April 30, 2027, or June 15, 2027 for self-employed people, but any balance owing is still due April 30.
How much CPP do I pay on side income?
You pay both halves of CPP on the profit, 11.9% in total, but only up to the yearly ceiling, and your salary uses up part of it first. For 2026 the ceiling is $74,600, the exemption is $3,500, and a second tier of 8% applies up to $85,000. With a $65,000 salary, $9,600 of room remains: $9,600 at 11.9% is $1,142, and $5,400 of second-tier earnings at 8% is $432, which adds up to $1,574. If your salary already passes $85,000, side income adds no CPP. Half of the base part is a deduction, per the Canada Revenue Agency: line 22200 page.
Will I have to pay tax by instalments?
You may, if your net tax owing is more than $3,000 ($1,800 in Quebec) this year and in either of the two years before. The extra $5,755 in the example is over that line, so a second year of side income could trigger instalments due March 15, June 15, September 15 and December 15. The CRA sets the rule out on its instalments page, and the tax instalments calculator covers amounts.
When do I have to register for GST/HST?
Once your taxable sales pass $30,000 in a single calendar quarter or over four quarters in a row. Below that you’re a small supplier and don’t have to charge GST/HST, although you can register voluntarily. The CRA explains the test in its RC4022 guide. Watch sales, not profit: the $30,000 counts revenue.
Which expenses can I deduct?
Costs you paid to earn the income: supplies, software, advertising and a reasonable share of your phone and internet. Each dollar saves your marginal rate plus CPP, about 35% in the example, so $100 of real expenses saves roughly $35. Personal costs don’t qualify. The site’s self-employed tax calculator works the same way for full-time owners, and the self-employed deductions article goes through more examples.
Where does this information come from?
The CPP, instalment and GST/HST rules come from the Canada Revenue Agency pages linked above. Tax and CPP amounts come from this site’s own 2026 tax engine. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Do I pay EI on side income?
No, not unless you opt in. Self-employed people are outside the regular EI program, so only your salary has EI premiums taken off. The side profit adds income tax and both halves of CPP, which is why the total is higher than the same amount earned as pay.
Is a small amount of side income tax free?
Not by itself. Your salary has already used up your basic personal amount, so profit is taxed from the first dollar. A few hundred dollars of profit costs only a few hundred dollars of tax, but it still belongs on your return.
What if my side hustle loses money?
A loss can reduce your other income if the CRA agrees you run the business to earn a profit. The calculator treats a loss as zero profit, so it shows no extra tax and doesn't estimate a refund. Keep your receipts either way.
What happens if I go over $30,000 in sales?
You have 29 days from the day your sales passed $30,000 to register for GST/HST, and you start charging it from that day. Past that point you're no longer a small supplier, even if your profit is much lower than your sales.