# Contractor Rate to Salary Calculator for Canada

> Turn an hourly or daily contract rate into the employee salary it equals after tax, CPP, unbilled days and benefits, and find the rate to match an offer.

A contractor in Ontario billing $85 an hour for 220 days of 8 hours bills $149,600 and keeps about $99,868 after $4,000 of expenses, income tax and both halves of CPP. To end up level, an employee needs roughly $129,104 a year with $3,500 of benefits and a 3% RRSP match. The shortcut of $85 times 2,080 hours gives $176,800, far more than the contract leaves you.

## How many days should I count as billable?

A year has about 260 weekdays, and a contractor is paid only for the days billed. Vacation, statutory holidays, sick days and gaps between contracts all come out of the 260. At 220 billed days, 40 weekdays go unpaid, and each one costs a day's pay of $680. Count honestly here, because this input moves the result more than any other.

## How do I turn a contract rate into a salary?

Work out what the contract leaves you after tax, then find the salary that leaves an employee the same amount once benefits are counted. In the example, the rate times billed hours is $149,600. Expenses take it down to $145,600 of business income, income tax is $36,439 and CPP with CPP2 is $9,293, so you keep $99,868. A salary of $129,104 gives an employee that much after tax, paid time off, benefits and the match.

## Why does a contractor pay more CPP than an employee?

A contractor pays both halves. An employee pays 5.95% on pay between $3,500 and $74,600, up to $4,230.45 in 2026, and the employer pays the same. A self-employed person pays up to $8,460.90 on the base amount, plus CPP2 above $74,600, and deducts the employer half from income. EI is optional for the self-employed and covers special benefits such as parental and sickness benefits, but not job loss. The [self-employed tax calculator](https://tax-services.ca/calculators/income-tax/self-employed-tax) shows the full tax picture.

## What contract rate matches a salary offer?

Higher than most people expect, because of the extra CPP, the unpaid days and the benefits you buy yourself. With the same days, expenses and benefits as above:

| Salary offer | Hourly rate to match |
| --- | --- |
| $50,000 | $36.15 |
| $75,000 | $51.83 |
| $95,000 | $63.53 |
| $100,000 | $66.55 |
| $125,000 | $82.54 |

## Where do GST/HST and the CRA's employee test come in?

GST/HST you add to an invoice is collected for the government and isn't income, so the rates here are before it. You must register once taxable revenue passes $30,000. Separately, the CRA decides from the whole relationship if you're really a contractor, including control, tools, financial risk and chance of profit, whatever the contract calls you. The [hourly to salary calculator](https://tax-services.ca/calculators/payroll-salary/hourly-to-salary) covers the employee side.

## Where does this information come from?

CPP rates and maximums, EI coverage for the self-employed, the employee test and the GST/HST threshold come from the CRA and Service Canada pages listed below; dollar results are estimates from this site's own tax engine (October 2026). 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](https://tax-services.ca/disclaimer).

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Source: https://tax-services.ca/calculators/payroll-salary/contractor-rate-to-salary
Last updated: 2026-10-11
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer