Self-Employed Taxes in Canada: A Freelancer’s Guide (2026)

Short answer: Self-employed taxes in Canada come in three parts: income tax on your net profit, both halves of the Canada Pension Plan (CPP) at 11.9% on net self-employment income (2025), and GST/HST once your revenue passes $30,000. You report income and expenses on Form T2125 with your personal T1 return. The deadline to file is June 15, but any balance owing is due April 30 — pay by April 30 to avoid interest. Keep records for six years.

Being your own boss means being your own payroll department. No one withholds tax for you, so you set aside your own money, track your own expenses, and hit your own deadlines. Here is the 2026 picture for freelancers, sole proprietors, and contractors, with figures cited from the Canada Revenue Agency (CRA) at canada.ca. If you are still at the setup stage, start with how to be self-employed in Canada and come back here for the numbers.

What taxes does a self-employed person pay in Canada?

You are generally on the hook for three things:

Obligation	What it is	Key figure (2025)
Federal + provincial income tax	Tax on your net business profit (income minus deductible expenses)	Progressive rates; varies by province
Canada Pension Plan (CPP)	You pay both the employee and employer share yourself	11.9% on net income between $3,500 and $71,300
GST/HST	A sales tax you collect from clients and remit to the CRA	Required once revenue exceeds $30,000 (see below)

You do not pay into Employment Insurance (EI) by default as a self-employed person, though you can opt in to EI special benefits (for example, parental or sickness benefits) through a separate program. Verify current EI opt-in rules on canada.ca.

What are the self-employed tax deadlines for the 2025 tax year?

Two dates matter, and confusing them is the most common — and most expensive — mistake.

Event	Date
Deadline to file your 2025 return (you or your spouse/common-law partner self-employed)	June 15, 2026
Deadline to pay any balance owing	April 30, 2026

The CRA is explicit: even though self-employed individuals get until June 15 to file, any 2025 balance owing must be paid by April 30, 2026, or interest starts accruing. In practice, you should calculate what you owe before April 30, pay it, and then file the paperwork by June 15.

How does CPP work when you are self-employed?

As an employee, you pay half of CPP and your employer pays the other half. When you are self-employed, you pay both halves yourself — this is why self-employed CPP can feel like a shock.

• Rate (2025): 11.9% on net self-employment income between the $3,500 basic exemption and the year’s maximum pensionable earnings (YMPE) of $71,300. Maximum base contribution: $8,068.20.
• CPP2 (second additional CPP): an extra 8% on income between $71,300 and the second ceiling of $81,200 in 2025 (maximum $792 for the self-employed).
• 2026 ceilings: YMPE rises to $74,600 and the second ceiling to $85,000. Confirm exact 2026 dollar figures on canada.ca.

CPP is calculated on Schedule 8 and paid with your return. One partial relief: you can deduct a portion of the CPP you pay on self-employment income. Verify the current treatment on canada.ca.

When do I have to register for GST/HST?

You must register for and start charging GST/HST once you stop being a small supplier. The CRA defines a small supplier as having $30,000 or less in worldwide taxable revenue over four consecutive calendar quarters (and in any single quarter).

• If your taxable revenue exceeds $30,000 over the last four consecutive calendar quarters (or in a single quarter), you are no longer a small supplier and must register.
• You have to charge GST/HST from your effective registration date, including on the sale that pushed you over $30,000.
• Certain businesses (for example, taxi and commercial ride-share drivers) must register from day one regardless of revenue.

You can also register voluntarily below $30,000, which lets you claim input tax credits (the GST/HST you paid on business purchases). Whether that is worth it depends on your clients and costs. The CRA sets this out under When to register for and start charging the GST/HST. Once you are registered, the tax has to appear as its own line on what you bill — the mechanics of that are in how to invoice as a freelancer in Canada.

How do I actually file? The T2125 and record-keeping

You do not file a separate corporate return as a sole proprietor. Instead:

1. Complete Form T2125, Statement of Business or Professional Activities, listing your gross income and each category of expense.
2. Attach the T2125 to your personal T1 income tax and benefit return.
3. The net profit flows into your total income and is taxed at your personal rates.

The T2125 is only as good as what sits behind it. Every expense line needs a receipt you can produce if the CRA asks — the six-year rule and what counts as adequate proof are covered in self-employed expenses and receipts in Canada. If you drive for work, the vehicle line has its own evidence standard: claiming vehicle expenses in Canada rests on a logbook that records business kilometres against total kilometres.

Self-employed tax checklist

• Track all business income (invoices issued and paid)
• Keep receipts for every deductible expense
• Maintain a vehicle logbook if you claim car costs (business km ÷ total km)
• Set aside money for income tax and CPP as you earn
• Watch your rolling 4-quarter revenue for the $30,000 GST/HST threshold
• Pay any balance owing by April 30, 2026
• File your T2125 + T1 by June 15, 2026
• Keep records for six years
• Consider whether CRA tax instalments apply to you next year

Do I have to pay tax instalments?

Possibly. If you owe more than a set amount of tax (net tax owing) in the current year and in either of the two previous years, the CRA may require you to pay income tax in quarterly instalments rather than in one lump sum. The CRA sends instalment reminders. Thresholds and due dates are on canada.ca under “Paying your income tax by instalments.”

Where does Keel fit in a year of record-keeping?

Good tax outcomes start with good records the rest of the year — not a shoebox in April. Keel: Invoice Maker & Receipts (by Ilura Technology) is built to be that record: invoices sent as PDFs with your own numbering, logo and brand colour, receipts photographed and read on the device by Apple Intelligence, and trips logged with date, distance and purpose. There is no account, no sign-in, no bank connection and no cloud — the App Store privacy label reads “Data Not Collected.” Entries sit in an append-only, hash-chained ledger, and at filing time the Accountant Pack exports the year as a CSV plus a one-page summary PDF.

The honest tradeoff for staying off the cloud is that nothing imports itself. Without a bank feed, every entry is something you typed or photographed in the moment. What that buys you is the evidence behind each line of the T2125 — a sequence of invoices with no gaps, a receipt behind each expense, and a trip log with raw kilometres — held on a device you control for the six years the record has to last, and handed over as one file when your accountant asks for the year. The tax positions themselves stay with you and your accountant.

Try Keel free (unlimited invoices, receipts and mileage free; Keel Pro is a one-time $249.99 Lifetime purchase, not a subscription — see the App Store for local pricing): Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

When are self-employed taxes due in Canada? For the 2025 tax year, the deadline to file is June 15, 2026, but any balance owing must be paid by April 30, 2026, or the CRA charges compound daily interest from May 1. The June 15 filing date applies to both you and your spouse or common-law partner if either of you is self-employed. If you are required to pay by instalments, those fall on their own quarterly dates.

How much should I set aside for taxes as a freelancer? There is no universal number because income tax is progressive and provincial rates differ, but many freelancers set aside 25–30% of net income for income tax plus CPP as a rough buffer. Confirm your situation with an accountant; this is a rule of thumb, not a CRA rule.

Do I need a business number to be self-employed? Not to simply earn self-employment income as a sole proprietor — you can trade under your own name and report on the T2125 without one. You do need a business number (BN) with a GST/HST program account once you register for GST/HST, and again if you hire employees and open a payroll account. The BN is nine digits, with a two-letter program identifier and a four-digit reference added per account, such as RT0001 for GST/HST.

Can I deduct home-office and phone costs? Yes, the business-use portion is generally deductible on the T2125 — usually the share of your home’s area used for work, or the share of a phone or internet bill that is genuinely business use. Business-use-of-home expenses cannot create or increase a loss; the unused amount carries forward to a future year. Keep the bills and the area calculation, and verify the current rules on canada.ca.

What happens if I file late? If you owe a balance and file after your deadline, the CRA charges a late-filing penalty of 5% of the balance owing plus 1% for each full month the return is late, to a maximum of 12 months — on top of compound daily interest. Repeat late filing in the previous three years can roughly double those rates. Filing on time even when you cannot pay in full avoids the penalty and leaves only interest.

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