Self-employment in Canada comes with financial responsibilities an employee never has to think about — nobody's withholding tax or CPP from your income automatically, so you have to build that discipline yourself.
As a self-employed worker, you pay both the employee and employer portions of CPP — a combined rate of 11.9% on net self-employment income between $3,500 and the year's maximum, plus an additional CPP2 rate on a higher earnings band. This roughly doubles what an employee sees deducted from a paycheque, since a regular employee only pays the employee half. The employer-equivalent half is deductible before calculating your income tax, which softens the blow somewhat.
If your total revenue (not profit) from self-employment exceeds $30,000 over four consecutive calendar quarters, you're required to register for and charge GST/HST — below that threshold, registration is optional. Once registered, you charge tax on your invoices and can claim input tax credits on business expenses, but you also need to remit what you collect to the CRA.
Since no one withholds income tax from freelance income, set aside a portion of every payment — many freelancers use 25-30% as a starting reference, adjusted to their actual tax bracket — in a separate account, rather than discovering the full bill at tax time. The CRA may also require quarterly tax instalments once your net tax owing crosses a certain threshold in prior years, so check whether that applies to you.
Informational content, not financial, tax, or legal advice. Verify amounts, limits, and current conditions directly with official sources (CRA, CDIC, OSFI) before making a decision.
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