How much should a Canadian freelancer set aside for taxes?

A common rule of thumb for Canadian self-employed earners is 25–30% of net business income for combined federal and provincial income tax plus CPP. If you're GST/HST registered, set aside the tax you collect separately — that money isn't yours, you're holding it for CRA.

Do I pay CPP on self-employment income?

Yes. Self-employed Canadians pay both halves of CPP — employee and employer — on contributory income above $3,500 (the basic exemption). The combined rate is 11.9% on income up to YMPE ($71,300 in 2025), plus CPP2 at 8% on income between YMPE and YAMPE ($81,200 in 2025).

Is GST/HST that I collect part of my income?

No. GST/HST collected is held in trust for CRA. Keep it in a separate account or treat it as untouchable. You remit it on your filing schedule, less any input tax credits on eligible expenses.

Free · Nova Scotia (HST 15%) · no signup

Nova Scotia — how much should I set aside for taxes?

A panic-in-April-prevention tool tuned to Nova Scotia's HST 15% rate. Estimates federal + provincial income tax, both halves of CPP, and (if you're registered) the sales tax you're holding for CRA. Conservative range, not a promise.

About you

Province

Expected net self-employed income for the year (CAD)

Gross business income minus business expenses, before tax. Use your best estimate.

Other taxable income (T4, investments, etc.)

Optional. Counts toward your overall bracket but doesn't affect CPP on SE income.

Set-aside rate

Combined income tax + CPP reserve: 28% of net SE income

25% is a common floor for low-bracket earners; 30–35% is realistic once you're past the second federal bracket. We apply a ±5 point band to show a range, not a single false-precision number.

GST/HST status

I'm registered for GST/HST

Check this if you've registered with CRA, or if you expect to cross $30,000 this year and want to plan ahead.

Annual taxable sales (CAD)

Taxable business expenses (CAD)

The three things self-employed Canadians get wrong about taxes.

1. They don't separate GST/HST from income. The tax you collect is not yours. It's CRA's money you're holding. Move it to a separate account on receipt — that's how professional bookkeepers handle it.

2. They forget CPP doubles. Self-employed Canadians pay both halves: 11.9% on contributory income up to $71,300 (2025 YMPE), plus 8% on the CPP2 band between $71,300 and $81,200. That's on top of income tax, not instead of.

3. They base set-aside on gross, not net. Set aside a percentage of net self-employed income (gross minus business expenses). Setting aside 30% of every invoice is fine as a heuristic; just remember your real liability is on what's left after expenses.

Common questions

Why a range, not a single number?

Because Canadian tax depends on bracket placement, provincial rate, credits, RRSP contributions, and dozens of other line items we don't ask you about. A single number would be falsely precise. The ±5 percentage-point band absorbs most of that uncertainty for typical freelancer profiles in the $30K–$120K net income range.

How is this different from a US "self-employment tax" calculator?

Different system entirely. US freelancers pay SE tax (Social Security + Medicare, ~15.3%) plus federal/state income tax. In Canada the equivalents are CPP (11.9% + CPP2 on a narrower base) plus federal and provincial income tax. The brackets, credits, and contribution caps are all Canadian-specific. A US calculator will be wrong.

Should I make instalment payments to CRA?

If your net tax owing was more than $3,000 last year and is expected to be again this year, CRA generally expects quarterly instalments (March, June, September, December). The set-aside number this calculator produces is a reasonable basis for those — but the actual instalment notice CRA sends is what governs. Talk to an accountant if you're new to instalments.

What about provincial sales tax (PST/QST)?

If you're in BC, Manitoba, Saskatchewan, or Quebec and sell services or goods subject to provincial sales tax, you'll also need to register provincially and collect that tax on top of GST/HST. This calculator shows the provincial reserve when applicable, but each province administers its own threshold and rules — confirm before relying on it.

Does this work for incorporated consultants?

Not really. If you're incorporated, your corporation pays T2 corporate tax (currently ~12.2% combined federal + provincial on the first $500K of active business income in most provinces), and you separately pay personal tax on salary or dividends taken from the corp. The math is different enough that you need a corporate-specific calculator — this one assumes a sole proprietor.

Make the reserve automatic.

MapleBooks tracks your real reserve target against your real bank balance — and warns you when you're underfunded. Built specifically for Canadian freelancers.

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Nova Scotia — how much should I set aside for taxes?

The three things self-employed Canadians get wrong about taxes.

Common questions

Make the reserve automatic.

This calculator for other provinces

Other Canadian freelancer calculators