How much tax should you set aside as a self-employed Canadian?
When you work for yourself, nobody takes tax off your pay. The money arrives whole, and in April CRA asks for its share. The fix is simple: move part of every payment into a separate savings account the day it lands.
What you will owe
- Federal and provincial income tax on your net business income (income minus business expenses), reported on form T2125.
- Both halves of CPP (QPP in Quebec). An employee pays half and the employer pays the other half; self-employed people pay both. For 2025 that is 11.9% on earnings between $3,500 and $71,300, plus CPP2 above that. Half of it is deductible.
- GST/HST, if you are registered. This is not your money — it belongs to CRA from the moment you collect it.
A rule of thumb
Many self-employed Canadians set aside 25% to 30% of their net income for income tax and CPP. If you charge GST/HST, put that amount aside too, separately and in full.
A worked example
Maya, a freelance designer in Ontario, earns $60,000 in 2025 and spends $12,000 on business expenses. Her net income is $48,000. Our self-employed tax calculator estimates her income tax and CPP for that year, and divides it by 12 so she knows what to move to savings each month.
Dates to remember
- April 30: any balance you owe is due, even though self-employed people can file their return until June 15.
- Instalments: if you owe more than $3,000 ($1,800 in Quebec) this year and in either of the last two years, CRA asks for quarterly payments on March 15, June 15, September 15 and December 15. Check with our instalment calculator.
Make it automatic
- Open a separate savings account named “CRA”.
- Every time a client pays, move 25–30% (plus any GST/HST) there.
- Check your estimate every quarter and adjust.
PlanTaxes.Pro shows your profit, the tax for your province and what to set aside, updated as you add income and receipts — so April is just a payment, not a surprise.
This article is general information, not tax or legal advice. See canada.ca for your situation.