Self-Employed in Canada: Taxes, GST and What to Track

Updated October 2026 with the CRA’s 2026 CPP rates, GST/HST rules and filing deadlines.

If you are self-employed in Canada, nobody takes tax off your income for you. You report your business income on Form T2125 with your personal return, pay both halves of your CPP (up to $8,460.90 for 2026, plus up to $832 of second CPP), and register for GST/HST once your sales pass $30,000 in four consecutive calendar quarters. You have until June 15 to file, but any balance owing is due April 30. Here is what that means in practice, and what to track all year so tax time is simple.

What counts as self-employed in Canada

You are self-employed if you earn business income for yourself rather than wages from an employer. That covers sole proprietors, independent contractors and freelancers, partners in a partnership, and gig workers such as delivery and ride-share drivers. If you have incorporated, your company is a separate taxpayer and files its own T2 return, so this guide is about unincorporated businesses.

Not sure whether you are an employee or a contractor? The CRA looks at control, who owns the tools, and whether you can make a profit or loss. We explain the test in employee vs contractor: how the CRA decides.

Self-employed taxes in Canada: how income tax works

Your business is not taxed separately. You add up the year’s business income and expenses on Form T2125, Statement of Business or Professional Activities, and the net profit goes on your personal T1 return with any other income. You pay income tax on that profit at the same federal and BC rates as anyone else.

• Gross income: everything you invoiced or were paid for the year, including amounts on T4A slips.
• Expenses: the costs of earning that income, such as supplies, phone, software, advertising, vehicle costs for business driving, and the business part of your home.
• Net income: gross income minus expenses. This is the number that is taxed.

If you run two different businesses, each one gets its own T2125. For the home office rules, see our guide to business-use-of-home expenses.

CPP when you are self-employed (2026)

An employee pays half of their CPP and the employer pays the other half. When you are self-employed you pay both halves, worked out on your return from your net self-employment income.

Part of what you pay is deductible on your return and the rest is claimed as a tax credit, so the real cost is a little lower than the table suggests. Self-employed people do not pay EI premiums unless they choose to sign up for EI special benefits.

GST/HST: when a self-employed person has to register

You are a “small supplier” and do not have to register while your taxable sales stay at $30,000 or less over four consecutive calendar quarters. Once you go over:

• Over $30,000 in a single quarter: you must register and start charging GST on the very sale that took you over.
• Over $30,000 across up to four quarters (but not in one): you stop being a small supplier at the end of the month after that quarter, and must register and charge GST from then on.

You can also register voluntarily before you reach $30,000. That lets you claim back the GST you pay on business costs (input tax credits), but you then have to charge GST and file returns. Most sole proprietors file GST once a year. In BC, some businesses also need to register for provincial PST, which is separate from the GST.

Self-employed tax deadlines for 2026

The June 15 date is only for filing. Interest starts on any unpaid balance from May 1, which catches a lot of first-year self-employed people. If you are already late, our CRA interest and penalty calculator shows what it is costing you.

Do I have to pay tax instalments?

The CRA asks for quarterly instalments if your net tax owing is more than $3,000 in the current year and in either of the two previous years. It usually happens in your second or third year of self-employment, when the CRA sees you owed tax the year before. If you get an instalment reminder, paying the amounts on it protects you from instalment interest.

What to track all year

Good records are the difference between a 30-minute appointment and a stressful week. The CRA expects you to keep your records and receipts for six years from the end of the tax year they relate to. Keep these:

• Every invoice you send and every payment you receive, including platform statements (Uber, DoorDash, Etsy, Shopify and so on).
• Receipts for every business expense, photographed or scanned. Digital copies are fine.
• A vehicle logbook: date, destination, purpose and kilometres for business trips, plus total kilometres for the year.
• Home office measurements and your utility, rent or mortgage-interest and insurance bills, if you work from home.
• T4A slips from clients, and your GST/HST collected and paid if you are registered.
• Your CPP and tax instalment payments, with dates.

How much should you set aside?

There is no single right number, because it depends on your profit, your other income and your credits. A simple habit is to move a fixed share of every payment into a separate savings account for tax, CPP and GST, and adjust it once you see your first return. If you want a number that fits your situation, we can work it out with you in one call.

Want us to file it for you?

We do self-employed tax returns every day for contractors, sole proprietors and drivers across the Fraser Valley, in our Abbotsford office or fully remote. Returns start at $145 when your numbers are ready, $190 for delivery drivers, or from $245 if we do your books too (prices before GST, see our pricing page). Book a free call and you get a fixed quote before we start.

Sources we used

• CRA: CPP contribution rates, maximums and exemptions (2026)
• CRA: Second additional CPP contribution rates and maximums (2026)
• CRA: When to register for and start charging the GST/HST
• CRA: GST/HST reporting requirements and deadlines
• CRA: Important dates for individuals
• CRA: Paying your income tax by instalments
• CRA: How long to keep your records
• CRA: Completing Form T2125

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