# 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

Working for yourself changes who handles your tax. Nobody withholds it from your pay, so you report the income, work out what you owe, and pay on a schedule. The rules aren't harder than an employee's. The dates are just yours to keep.

## What do you report?

You report your business income and subtract what it cost you to earn it. What's left, your net business income, is taxed at your personal rates along with any other income you have. Keep receipts and invoices for every cost you claim, because the CRA can ask to see them for years afterwards.

The [self-employed tax calculator](https://tax-services.ca/calculators/income-tax/self-employed-tax) turns net income into tax and CPP for your province. Our article on [business expense deductions](https://tax-services.ca/articles/business-expense-deductions) covers what usually qualifies, and the [self-employed expenses checklist](https://tax-services.ca/checklists/self-employed-expenses) is handy when you're sorting a year of receipts.

## How does CPP work when you're self-employed?

An employee pays half of the CPP contribution and the employer pays the other half. When you work for yourself, you pay both. For 2026 the combined rate is 11.9% of net earnings between $3,500 and $74,600, which comes to as much as $8,460.90. The [limits page](https://tax-services.ca/tax-numbers) shows the employee figures for comparison.

A quick ballpark: Priya, a freelance designer in Halifax, nets $40,000. Her CPP is 11.9% of $36,500 (that's $40,000 less the $3,500 exemption), or about $4,343.50. That's before any income tax, so set some money aside as the cheques come in rather than in April.

## When do instalments apply?

Because no one withholds tax, the CRA may ask you to pay in four instalments, due March 15, June 15, September 15 and December 15. The [tax instalments calculator](https://tax-services.ca/calculators/income-tax/tax-installments) checks if you must pay and splits the year into four payments.

Your return is due June 15, but the balance is due April 30. That gap catches plenty of first-year freelancers. The [tax calendar](https://tax-services.ca/tax-calendar) puts both dates side by side.

## When do you register for GST or HST?

Once your taxable sales pass $30,000 you have to register, charge the tax and file returns. The CRA's [general information for GST/HST registrants](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4022/general-information-gst-hst-registrants.html) defines the small supplier limit.

Below that it's optional, and plenty of freelancers register early anyway, since you can't claim back the tax you pay on a laptop or a software subscription until you're in the system. The [GST, HST, PST and QST guide](https://tax-services.ca/guides/gst-hst-pst) has the whole picture.

## Sole proprietor or corporation?

A sole proprietor and the business are one taxpayer. A corporation is a separate taxpayer with its own return and its own rates, and it brings extra filing and payroll work that you can't skip. The [corporate tax calculator](https://tax-services.ca/calculators/business-tax/corporate-tax-calculator) shows the difference in tax, and the [payroll remittance calculator](https://tax-services.ca/calculators/business-tax/payroll-remittance) covers what an employer sends the CRA.

## What do new freelancers usually miss?

Three things come up again and again. Mixing personal and business spending makes receipts hard to sort. Forgetting that the tax bill arrives in one lump if you didn't set money aside. And assuming the June 15 filing date also moves the payment date, which it doesn't.

## More for small businesses

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Source: https://tax-services.ca/guides/self-employed-and-small-business
Last updated: 2026-10-08
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer