Independent Consultant Taxes in Canada
Consultants often have few clients, large invoices and retainers — which means GST/HST and quarterly instalments arrive quickly.
What independent consultants can usually deduct
- Professional fees: accountant, lawyer, professional association dues
- Professional liability insurance
- Travel to clients: transportation, hotels, 50% of meals
- Home office or rented office
- Phone, internet, software and research subscriptions
- Marketing: website, LinkedIn premium, conferences
Only the business part of a cost is deductible, and you need a receipt or record for each. See CRA's guide T4002.
GST/HST
Most consulting is taxable for GST/HST. With retainers you can pass $30,000 within one quarter — then you must charge GST/HST from the sale that took you over. Check with our GST/HST calculator.
Keep good records
If your net tax owing is over $3,000, CRA will ask for quarterly instalments — plan them with the instalment calculator. Keep records for six years.
What to set aside — quick estimate
Your province
- Self-employed tax in Ontario
- Self-employed tax in Quebec
- Self-employed tax in British Columbia
- Self-employed tax in Alberta
- Self-employed tax in Manitoba
- Self-employed tax in Saskatchewan
- Self-employed tax in Nova Scotia
- Self-employed tax in New Brunswick
- Self-employed tax in Newfoundland and Labrador
- Self-employed tax in Prince Edward Island
- Self-employed tax in Yukon
- Self-employed tax in Northwest Territories
- Self-employed tax in Nunavut
Questions
Do consultants have to pay instalments?
If net tax owing is over $3,000 ($1,800 in Quebec) this year and in either of the last two, yes — on March 15, June 15, September 15 and December 15.
Are client meals deductible?
Generally 50% of business meals and entertainment, with a record of who and why.