Skip to main content
Book a free consultation

Personal tax

CPP on self-employment income: how much you pay in 2026

Employees see Canada Pension Plan contributions come off each paycheque. If you are self-employed, nothing comes off, and the bill appears when you file your return. You pay both the employee and the employer share, and the amount is based on net business income. This article explains the 2026 figures, shows two illustrative calculations, describes how the contribution is deducted and claimed, and covers situations where the standard calculation changes.

Sora Accounting & Tax · General information · Editorial policy
Updated · 5 min read

Employee and employer shares on one return

A balance showing the employee and employer CPP shares that a self-employed person pays together, plus the CPP2 band above the first ceiling.

Visual labels: Employee share; Employer share; CPP2 above $74,600.

See the sourced 2026 Ontario tax guide: rates, limits and deadlines →

What to take away

  • For 2026, self-employed contributors pay 11.9% of net business income between $3,500 and $74,600, to a maximum of $8,460.90.
  • Earnings between $74,600 and $85,000 attract a further 8% (CPP2), to a maximum of $832.
  • Contributions are calculated on Schedule 8 of your T1 return and are split between a credit and deductions.

Why you pay both halves

CPP is financed by contributions from employees, employers and self-employed people. An employee pays half the required contribution and the employer pays the other half. When you work for yourself there is no employer, so you pay the whole amount. That is why the self-employed rate is double the employee rate shown on a pay stub.

You pay once a year, when you file your T1 return, using Schedule 8. It does not come out at the time you earn the income, which is why people are often surprised by it. Our article on how much tax to set aside when you are self-employed treats it as part of the same savings plan.

The 2026 figures

For 2026, the CPP earnings ceiling is $74,600 and the minimum below which you do not contribute is $3,500. The contribution rate on earnings between those amounts is 11.9% for self-employed people, made up of 9.9% for the base plan and 2% for the first additional contribution. The maximum is $8,460.90.

Since 2024 there is also a second additional contribution, known as CPP2, on pensionable earnings between $74,600 and $85,000. The self-employed rate is 8% and the maximum is $832. CPP2 only applies when your earnings are above the first ceiling.

What counts as the base

Your contributions are based on net business income, which is what remains after allowable expenses. Investment income, such as interest and dividends, is not part of the base. A self-employment loss cannot be used to reduce CPP contributions paid on employment earnings.

If you are a partner, the CRA says to include only your share of the net profit. This is one reason accurate bookkeeping matters: a missed expense raises both your income tax and your CPP, while an invented one risks an adjustment and interest. Reconcile your income and expenses before you rely on a CPP estimate, and keep receipts that support each deduction.

Two illustrative examples

These figures are illustrative only. Suppose your net business income for 2026 is $60,000 and you have no other pensionable earnings. The pensionable amount is $60,000 less $3,500, which is $56,500. At 11.9%, the contribution is $6,723.50. There is no CPP2, because $60,000 is below $74,600.

Now suppose net income is $80,000. The base part is the maximum of $8,460.90. CPP2 applies to the $5,400 between $74,600 and $80,000 at 8%, which is $432. The total is $8,892.90. Anyone with income above $85,000 stops at the maximums of $8,460.90 plus $832.

How it is deducted and claimed

The CRA describes a split for the self-employed. For the base contribution, you claim a non-refundable tax credit on 4.95% of pensionable earnings and a deduction for the other 4.95%. The first additional contribution (2%) and all CPP2 contributions are deductions. Using the $60,000 illustration, the credit part relates to $2,796.75 and the deduction part is $3,926.75.

A deduction reduces taxable income, while a credit reduces the tax calculated. Tax software does this for you, and the Schedule 8 result is carried to the deduction and credit lines of the return. If you are required to pay instalments, CPP is part of the calculation, so it is built into your quarterly payments.

If you also have a job

Many people have a T4 job and a side business. Your employer deducts CPP up to the maximum, and those contributions count toward the same annual ceilings. Schedule 8 takes your T4 amounts and works out whether you owe more on the self-employment income, or whether you contributed too much.

An overpayment is refunded when you file, and a request for a refund of CPP over-contributions must be made within four years of the end of the year it occurred in. If you had more than one employer and the total of your CPP is below the required amount, you may be able to make additional contributions. Check the T4 boxes before you file.

Situations that change the calculation

Contributions are prorated if you turned 18 or 70 during the year, received a CPP disability pension, or elected to stop paying as a working beneficiary. At age 70 you no longer contribute. Quebec residents deal with the Quebec Pension Plan instead, and a mix of the two uses Form RC381.

Self-employed EI premiums are separate and optional. They apply only if you entered an agreement to participate, at $1.63 per $100 earned to a maximum of $1,123.07 for 2026. If you incorporate and pay yourself salary, the corporation and you each contribute, so the result is different. See our guide on whether you should incorporate.

What to bring to your accountant

Bring your T4 slips, year-end profit and loss summary, last year’s Schedule 8, any instalment reminders and notices of assessment, and your Statement of Contributions if you want to check that your earnings are recorded correctly. Ask how a change in expenses or the timing of income would move both CPP and income tax, and whether your income is close to a ceiling where the next dollar costs less.

One more point is worth raising. CPP contributions also build your future pension record, since Service Canada says both how long and how much you contribute are factors in the benefit. A contribution is therefore not only a cost, although it is still a cash payment you need to plan for. Estimate it early in the year so the amount is not a surprise when you file.

Sources & editorial notes

Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.

Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.