Key takeaways
- Self-employed people pay both the employee and employer share of CPP: 11.9% in 2026
- CPP2 adds 8% on earnings between $74,600 and $85,000
- Half of your CPP is a deduction, which lowers your income tax
- You do not pay EI unless you opt in to EI special benefits
- Payment is due April 30; the return is due June 15
CPP for self-employed people in 2026
An employee pays half of the Canada Pension Plan (CPP) and the employer pays the other half. When you are self-employed, you are both, so you pay both halves when you file your return.
| 2026 figure | CPP | QPP (Quebec) |
|---|---|---|
| Basic exemption | $3,500 | $3,500 |
| Maximum pensionable earnings (YMPE) | $74,600 | $74,600 |
| Self-employed rate | 11.9% | 12.6% |
| Maximum self-employed contribution | $8,460.90 | $8,958.60 |
| Second ceiling (YAMPE) | $85,000 | $85,000 |
| CPP2 / QPP2 self-employed rate | 8% | 8% |
| Maximum CPP2 / QPP2 | $832 | $832 |
If you also have a job, the CPP your employer deducted counts first. You only pay self-employed CPP on the rest, up to the same ceilings.
How CPP lowers your income tax
You can deduct the employer half of your CPP and the "enhanced" part of your own half from your income. The base part of your own half gives you a tax credit. The calculator does this for you. It is one reason the real cost of CPP is lower than 11.9%.
Remember: CPP is not lost money. It builds your CPP retirement pension, and contributions also count toward CPP disability and survivor benefits.
What is net self-employment income?
Net income is your business revenue minus business expenses you can claim on Form T2125. Common expenses include supplies, phone and internet (business share), software, advertising, professional fees, and vehicle costs for business driving. Keep receipts for six years.
If your revenue is over $30,000 in four calendar quarters in a row, you must register for and charge GST/HST. Our GST/HST calculator shows the rate for each province.
Worked example
Priya is a freelance designer in Ontario with $60,000 of net income in 2026 and no other job. Her CPP is $6,723.50 (11.9% of $60,000 minus $3,500). After deductions and credits, her income tax is about $7,880. In total she should set aside about $14,600, or roughly 24% of her net income: about $1,220 a month.
Instalments and deadlines
- Return due: June 15 for self-employed people and their spouses.
- Payment due: April 30. Interest starts on May 1 even though the return is due later.
- Instalments: if your net tax owing is more than $3,000 (or $1,800 in Quebec) this year and in either of the two previous years, CRA sends instalment reminders. You then pay quarterly on March 15, June 15, September 15 and December 15.
A simple habit: move your set-aside percentage into a separate savings account every time a client pays you. A high-interest savings account earns something while you wait.
Newcomers and gig work
Many newcomers start with delivery, ride-share or contract work. Check your permit first: some work permits and study permits limit the kind of work you can do. See our guide to international student work rules. You need a SIN to get paid and to file: see how to get a SIN.
If you have both a job and side income, compare the result with your pay stubs using the tax refund calculator.