Self-Employed Tax Calculator
Calculate your taxes as a freelancer, contractor, or small business owner in Canada.
Self-Employment Tax Components
| Component | Rate | Max Amount |
|---|
| Federal income tax | 15-33% | Progressive |
| Provincial income tax | 4-25% | By province |
| CPP (both portions) | 11.9% | ~$8,132 |
| EI (optional) | 1.63% × 1.4 | ~$1,508 |
Tax Calculation: Ontario Self-Employed
Before Deductions
| Gross Revenue | CPP | Income Tax | Total Tax | Take-Home |
|---|
| $50,000 | $4,875 | $5,768 | $10,643 | $39,357 |
| $75,000 | $7,314 | $12,203 | $19,517 | $55,483 |
| $100,000 | $8,132 | $20,155 | $28,287 | $71,713 |
| $125,000 | $8,132 | $28,737 | $36,869 | $88,131 |
| $150,000 | $8,132 | $38,178 | $46,310 | $103,690 |
With $20,000 Deductions
| Gross Revenue | Net Income | Total Tax | Effective Rate | Take-Home |
|---|
| $50,000 | $30,000 | $4,788 | 9.6% | $45,212 |
| $75,000 | $55,000 | $12,118 | 16.2% | $62,882 |
| $100,000 | $80,000 | $20,650 | 20.7% | $79,350 |
| $125,000 | $105,000 | $30,098 | 24.1% | $94,902 |
| $150,000 | $130,000 | $40,398 | 26.9% | $109,602 |
Self-Employed vs Employee Comparison
$80,000 Total Compensation
| Factor | Employee | Self-Employed |
|---|
| Gross income | $80,000 | $80,000 |
| CPP employee | $4,066 | $8,132 (both) |
| EI | $1,077 | $0 (optional) |
| Income tax | $14,500 | $14,500 |
| Deductions available | Limited | $10,000+ |
| Net after tax | $60,357 | $57,368 |
| With deductions | $60,357 | $62,000+ |
Common Self-Employment Deductions
Home Office
| Expense | Method 1: Detailed | Method 2: Simplified |
|---|
| Calculation | Actual % of home | $5/sq ft |
| Maximum | No limit | $0 (varies) |
| Depreciation | Can claim | No |
| Recommended for | Larger home office | Simplicity |
Example: 200 sq ft office in 1,500 sq ft home
| Deduction Type | Calculation | Amount |
|---|
| Rent ($2,000/mo) | 13.3% × $24,000 | $3,200 |
| Utilities ($200/mo) | 13.3% × $2,400 | $320 |
| Internet ($100/mo) | 50% business | $600 |
| Total home office | | $4,120 |
Vehicle Expenses
| Expense | Business Use 50% |
|---|
| Gas ($3,000) | $1,500 |
| Insurance ($2,000) | $1,000 |
| Maintenance ($1,000) | $500 |
| Depreciation (CCA) | $2,500 |
| Total vehicle | $5,500 |
Business Expenses
| Category | Typical Annual |
|---|
| Software subscriptions | $500-2,000 |
| Professional development | $500-3,000 |
| Office supplies | $200-500 |
| Professional fees (accounting) | $500-2,000 |
| Advertising | $500-5,000 |
| Business insurance | $500-2,000 |
Sample Tax Calculation
Freelance Web Developer: $95,000 Gross
| Item | Amount |
|---|
| Gross revenue | $95,000 |
| Deductions: | |
| Home office | -$4,000 |
| Computer/equipment | -$2,000 |
| Software | -$1,500 |
| Professional development | -$1,000 |
| Accounting | -$1,500 |
| Net business income | $85,000 |
| CPP (11.9% of $85,000-$3,500) | $8,132 (max) |
| Taxable income | $85,000 |
| Income tax (federal + Ontario) | ~$17,500 |
| Total tax + CPP | $25,632 |
| Take-home | $69,368 |
| Effective rate | 27.0% |
Quarterly Tax Installments
| Situation | Requirement |
|---|
| Tax owing > $3,000 | Must pay quarterly |
| Due dates | Mar 15, Jun 15, Sep 15, Dec 15 |
| Penalty for missing | Interest charged |
Installment Calculation
| Method | How It Works |
|---|
| Prior year | 1/4 of last year’s tax |
| Current year | Estimate current, pay 1/4 |
| No-calculation | CRA sends amounts |
Incorporation Considerations
When to Incorporate
| Situation | Recommendation |
|---|
| Net income < $50,000 | Stay sole proprietor |
| Net income $50-100K | Evaluate costs vs benefits |
| Net income > $100,000 | Incorporation likely beneficial |
| Liability concerns | Incorporate for protection |
Corporation vs Personal Tax
| Net Income | Personal Rate | Corporate Rate | Difference |
|---|
| $50,000 | 28% | 12.2%* | Hold in corp: 16% savings |
| $100,000 | 35% | 12.2%* | Hold in corp: 23% savings |
| $150,000 | 41% | 12.2%* | Hold in corp: 29% savings |
*Small business rate on first $500K. Tax deferred, not avoided — paid when withdrawn.
HST/GST Registration
| Factor | Details |
|---|
| Required if | Revenue > $30,000/year |
| Rate to charge | 13% (Ontario), 5% (Alberta), etc. |
| Input tax credits | Claim HST on business expenses |
| Filing frequency | Annual, quarterly, or monthly |
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