Self-employed tax calculator for Ontario 2026

How the calculation works

Tax and CPP = federal and Ontario income tax on (net income − CPP deduction) + CPP + CPP2. Following Schedule 8, you pay both shares of CPP: 9.9% on base earnings, 2% for the first additional contribution and 8% for CPP2. Half of the base contribution earns a non-refundable credit; the other half, the first additional contribution and all of CPP2 are deducted from income. The set-aside percentage is tax plus CPP divided by net income, rounded up to a whole percent.

A worked example

At an illustrative $60,000 of net self-employment income, CPP is $6,723.50. Of that, $2,796.75 earns the credit and $3,926.75 is deducted, so taxable income is $56,073.25. Federal tax is $5,155.43 and Ontario tax is $2,723.99, for $7,879.42 of income tax. Income tax plus CPP is $14,602.92, or 24.34% of net income, so setting aside about 25% of each dollar of net income would cover it. The next $1,000 of net income would add about $324.98 of tax and CPP.

Assumptions and limits

Net income means business income after expenses, so the estimate moves when your deductions do. The tool treats it as your only income for a full year and leaves out other income, any CPP already withheld on a T4, EI (self-employed people do not pay it unless they register for special benefits), RRSP and other deductions, most credits, GST/HST, and the tax you would pay through a corporation. CPP is calculated on your return; no tax is withheld during the year. If your net tax owing is more than $3,000 this year and was also more than $3,000 in either of the two years before, the CRA generally expects quarterly instalments, and interest can apply if they are short. Your balance is due April 30, 2027 even though most self-employed people have until June 15, 2027 to file. A set-aside is a planning figure, not a filing amount.

General educational information. Inputs stay on this device and are not submitted. Confirm the assumptions before using a result in a business decision.

Source and further reading

2026 figures checked October 24, 2026 against the CRA pages; the CPP credit and deduction split follows the CRA’s Schedule 8: CRA: Schedule 8, Canada Pension Plan contributions and overpayment (self-employment income only); CRA: line 22200, deduction for CPP or QPP contributions on self-employment income; CRA: income tax instalments; CRA: tax rates and income brackets for 2026; CRA: CPP contribution rates, maximums and exemptions; CRA: CPP2 contribution rates and maximums. The examples above use Sora’s own illustrative figures.

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