Self-Employed Taxes in Canada (T2125) Explained

Freelancing in Canada means reporting your business income on Form T2125 with your personal return. Here's what to expect.

Income tax — federal and provincial

Your net self-employment profit is taxed at combined federal and provincial rates. Federal brackets start at 15%, and each province adds its own rate on top.

CPP for the self-employed

Employees split CPP with their employer — but the self-employed pay both halves, roughly 11.9% of net earnings up to the annual maximum. It's the biggest surprise for new freelancers.

Common deductions (T2125)

• Home office (business-use-of-home)
• Vehicle expenses for business kilometres
• Supplies, software and subscriptions
• Professional and business fees

Estimate your bill

Try our free Canada self-employed tax calculator — it estimates federal tax, CPP and provincial tax together.