CPP for Self-Employed Canadians: 2026 Rates, Maximums and Schedule 8

Short answer: Yes, self-employed people pay CPP, and they pay both the employee and the employer half. For the 2026 tax year that is 11.9% of net self-employment income between $3,500 and $74,600 (maximum $8,460.90), plus CPP2 at 8% on income between $74,600 and $85,000 (maximum $832), for a combined ceiling of $9,292.90. You work it out on Schedule 8 and pay it with your income tax. Part of it becomes a tax credit; the rest, including all of CPP2, is a deduction.

These are the Canada Revenue Agency (CRA) figures for the 2026 tax year, the return you file in 2027. They apply to sole proprietors, freelancers and contractors in every province and territory except Quebec, where the Quebec Pension Plan (QPP) takes CPP’s place. CPP sits on top of income tax, so read this alongside self-employed taxes in Canada. If you are not sure you count as self-employed in the first place, start with contractor vs employee in Canada.

Do self-employed people pay CPP?

Yes: if you are 18 or older and your net self-employment income is above the $3,500 basic exemption, you contribute, and nobody else pays a share for you.

An employee’s pay stub shows only half the CPP bill, because the employer matches it. Working for yourself, you are both parties, which is why self-employed CPP looks twice what you paid at your last job.

A few edge cases:

• You also have a job. CPP your employer already deducted counts toward the same annual maximum. Schedule 8 only charges you on the room left over.
• You are 60 to 70 and already receiving a CPP or QPP retirement pension. You still contribute. From 65, you can elect to stop, and the election stays in effect until you turn 70 or revoke it, per the CRA’s page on CPP working beneficiaries. Contributions end at 70 regardless.
• You live in Quebec. You contribute to the QPP instead, which has its own rates and runs through your Quebec return. Everything below is CPP.

What are the 2026 CPP rates and maximums for the self-employed?

For 2026, you pay 11.9% on earnings between $3,500 and $74,600 and 8% on earnings between $74,600 and $85,000, up to a total of $9,292.90.

2026 figure	Employee pays	Self-employed pays
Basic exemption	$3,500	$3,500
First earnings ceiling (YMPE)	$74,600	$74,600
Base + first additional rate	5.95%	11.9%
Maximum base + first additional	$4,230.45	$8,460.90
Second earnings ceiling (YAMPE)	$85,000	$85,000
CPP2 rate	4%	8%
Maximum CPP2	$416.00	$832.00
Total maximum	$4,646.45	$9,292.90

The 11.9% is itself two pieces: a base contribution of 9.9% and a first additional contribution of 2%, the part added by the CPP enhancement that began in 2019. The most you can contribute at that rate is on $71,100 of earnings ($74,600 minus the $3,500 exemption). CPP2, the second additional contribution, only touches income between the two ceilings.

The CRA publishes these on its CPP contribution rates, maximums and exemptions page and its CPP2 rates and maximums page. For comparison, the 2025 ceilings were $71,300 and $81,200. The 2027 figures have not been announced as of October 2026, so do not budget next year on this year’s ceilings.

How is CPP calculated on self-employment income?

You take your net self-employment income, subtract $3,500, and multiply what is left (up to $71,100) by 11.9%; then you add 8% of anything between $74,600 and $85,000.

CPP (base + first additional) = (net self-employment income − $3,500) × 11.9%
                                maximum $8,460.90
CPP2 = (net self-employment income up to $85,000 − $74,600) × 8%
       only if above $74,600; maximum $832.00

Three details change the answer more than people expect:

1. It is net, not gross. The starting point is the net profit from your Form T2125, after business expenses. Every legitimate expense you claim lowers your income tax and your CPP, which is one more reason the receipts in self-employed expenses in Canada are worth keeping.
2. Employment CPP comes off first. If you had a T4 job for part of the year, Schedule 8 counts what your employer already deducted and charges you only on the remaining room.
3. Nothing is withheld. Unlike payroll CPP, self-employed contributions land as one amount on your return, so they need to be set aside from each invoice you are paid.

Is CPP tax deductible for the self-employed?

Partly: 4.95 percentage points of your base contribution become a non-refundable tax credit, and everything else, including the employer half, the 2% first additional contribution and all of CPP2, is a deduction from income.

Part of the contribution	2026 rate	Tax treatment	Return line
Base, “employee” half	4.95%	Non-refundable tax credit	Line 31000
Base, “employer” half	4.95%	Deduction	Line 22200
First additional	2%	Deduction	Line 22200
Second additional (CPP2)	8%	Deduction	Line 22200

The CRA sets out this split in its explainer on the CPP enhancement for the self-employed, and on its pages for line 22200 and line 31000.

The two treatments are worth different amounts. A deduction lowers your taxable income, so it saves tax at your marginal rate. A credit is worth a fixed rate: federally, most non-refundable credits are calculated at the lowest bracket rate, which the Department of Finance confirms is 14% for 2026. The matching provincial or territorial credit is claimed on your Form 428. The higher your income, the more the deduction half is worth to you.

Worked example: how much CPP do you pay at $50,000 and $95,000?

Here is the 2026 calculation for two self-employed people outside Quebec with no employment income.

	Priya, bookkeeper, Winnipeg	Marc, electrician, Ottawa
Net self-employment income	$50,000	$95,000
Earnings at 11.9%	$46,500	$71,100 (capped)
Base + first additional (11.9%)	$5,533.50	$8,460.90
CPP2 (8%)	$0	$832.00
Total CPP	$5,533.50	$9,292.90
Credit amount, line 31000 (4.95%)	$2,301.75	$3,519.45
Deduction, line 22200	$3,231.75	$5,773.45
Set aside per month	about $461	about $774

Priya earns below the first ceiling, so she pays 11.9% on $46,500. Her deduction is the other 4.95% ($2,301.75) plus the 2% first additional contribution ($930.00). With taxable income inside the 14% federal bracket for 2026, the deduction saves her about $452 in federal tax and the credit about $322, before any provincial relief.

Marc is above both ceilings, so he hits both maximums: $8,460.90 plus CPP2 of $832.00 (8% of the $10,400 between $74,600 and $85,000). His deduction is $3,519.45 + $1,422.00 + $832.00 = $5,773.45. Because his income sits in the 2026 federal bracket taxed at 20.5% ($58,523 to $117,045), that deduction is worth about $1,184 federally, and the credit about $493.

Neither example includes provincial tax relief, which varies by province.

Which CPP tax form do self-employed people use?

You use Schedule 8, Canada Pension Plan Contributions and Overpayment, filed with your T1 return; tax software fills it from your T2125 net income.

Schedule 8 does four jobs:

• calculates your contributions on self-employment income, net of any CPP already deducted by an employer;
• splits the result between the credit at line 31000 and the deduction at line 22200;
• carries the amount you owe to line 42100, CPP contributions payable on self-employment and other earnings, where it joins your income tax balance;
• holds the election to stop contributing, if you are 65 to 70 and receiving a CPP or QPP retirement pension.

If your year involved both plans, for example employment in Quebec while you lived in another province, the calculation moves to Form RC381, Inter-Provincial Calculation for CPP and QPP Contributions and Overpayments, instead of Schedule 8.

When do you pay CPP as a self-employed person?

You pay it with your income tax balance for the year, because nothing is withheld from what clients pay you.

That means CPP is due on the same date as any income tax you owe, not on the later filing date the self-employed get. The dates for the 2026 tax year are in the self-employed tax deadline guide. If the CRA asks you to pay instalments, the CPP on your self-employment income is part of the amount the instalments are meant to cover, so it is spread through the year rather than arriving in one lump.

The practical habit: when an invoice is paid, move a fixed share into a separate account for tax and CPP. At $95,000 of net income, CPP alone is close to a tenth of your profit. Every other self-employed topic for Canada is collected in the Canada guides hub.

…and where does Keel fit?

Keel does not calculate CPP, fill in Schedule 8 or connect to the CRA. What it does is keep the records your net self-employment income is built from. Keel: Invoice Maker & Receipts is an iPhone app where your estimates, invoices, receipts, expenses and business mileage sit together under each job, with a “who owes you” view and reminder drafts you review and send yourself. Everything stays on the iPhone: no account, no bank connection, no cloud sync, and the App Store privacy label reads “Data Not Collected”.

It is free with no invoice limit (free invoices carry a small “Made with Keel” footer). Keel Lifetime, a one-time $249.99 USD purchase (the App Store shows your local price), adds custom branding, signature, premium templates and accountant-ready exports and advanced reports, which is the hand-off you need when someone else prepares your return. Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

Can I opt out of CPP if I’m self-employed? Not before 65. If you are between 65 and 70 and already receiving a CPP or QPP retirement pension, you can elect on Schedule 8 to stop contributing, and the election lasts until you turn 70 or revoke it. From 18 until 65, contributions are compulsory whenever your net self-employment income is above the $3,500 basic exemption.

Do I pay CPP on self-employment income if I also have a job? Yes, but one annual maximum covers both. The CPP your employer deducted counts toward it, and Schedule 8 charges you only on the room left, at the full self-employed rates of 11.9% and 8%. If your employment earnings already reached the 2026 ceilings, you owe no further CPP on your business income.

What does CPP mean on my tax return? CPP is the Canada Pension Plan, a contributory public pension, and the CPP lines on your return are contributions toward your own future retirement, disability and survivor benefits rather than income tax. For the self-employed they show up three times: the deduction at line 22200, the credit at line 31000 and the amount payable at line 42100.

Do I pay CPP if my business made a loss? No. CPP is based on net self-employment income, so if your net income for the year is $3,500 or less, including a loss, you have no CPP to pay on it. The flip side is that a year with no contributions adds nothing toward your future CPP pension, which is based on your contributions over your working life.

Is it worth paying less CPP by claiming more expenses? Only if the expenses are real. Every legitimate business expense lowers both your income tax and your CPP, because both are calculated on net income. But lower contributions also mean a smaller CPP pension later, and an expense you cannot support with a receipt can be disallowed, which brings the CPP back with interest.

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This article is general information, not tax advice. Consult a qualified accountant or tax professional.