Being self-employed means you’re in control of your own schedule and you have unlimited income potential (that is directly tied to your successes and failures). However, it also means tracking revenue and expenses, keeping receipts, and putting money away for taxes throughout the year.
If you’re wondering how to prepare for your self-employed taxes in Canada this year, keep reading – this article is full of helpful information and tips.
Key Takeaways
- Tax brackets for self-employed people are the same as for everyone else.
- Advertising, travel, and vehicle expenses are a few of the deductibles the CRA allows self-employed people to claim on their taxes.
- Once you generate over $30,000 in self-employed income, you’re required to apply for an HST number and begin charging taxes on the goods and services you’re selling.
How do self employed taxes work in Canada?
If you’re self-employed, it’s important to be aware of the various federal and provincial tax brackets so you can put enough money away to cover your taxes when it’s time to pay.
Here are the current federal tax brackets for all Canadians, including those who are self-employed.
| Income earned | Federal tax rate |
|---|---|
| Under $55,867 | 15% |
| $55,868–$111,733 | 20.5% |
| $111,734–$173,205 | 26% |
| $173,205–$246,752 | 29% |
| Over $246,752 | 33% |
You’ll also need to pay provincial taxes – the rates you pay are dependent on where you live. For a complete list of provincial tax rates in your province, visit your provincial government website.
Tax rates by province
Once you generate over $30,000 in self-employed income, you’re required to apply for an HST number and begin charging taxes on the goods and services you’re selling, collecting those taxes, and remitting them to the government.
The tax rate you’ll charge will depend on where the sale is made. In some cases, what you’re selling will also affect the tax rate – basic groceries are taxed at a 0% GST/HST rate, no matter where you are in Canada.
| GST/HST Rate | Province/Territory |
|---|---|
| 5% (GST) | * Alberta * British Columbia * Manitoba * Saskatchewan * Quebec * Nunavut * Northwest Territories * Yukon |
| 13% (HST) | * Ontario |
| 15% (HST) | * New Brunswick * Newfoundland and Labrador * Nova Scotia * Prince Edward Island |
When do I pay self-employed taxes?
After your first year of self-employment, you'll pay any taxes owing after you file your tax return, just like if you worked for an employer.
However, depending on where you live and how much money you make, the government may assess your tax return and require you to pay tax installments throughout the following year, rather than paying your taxes in one lump sum at tax time.
Don’t worry – every February and August, the Canada Revenue Agency sends out tax installment reminders to those who need to make payments.
Can I claim self-employed tax write-offs in Canada?
If you are self-employed, you can claim expenses related to your business to offset the income generated by that business. These expenses can be deducted from your taxable income to reduce the amount of taxes you need to pay.
Here are some examples of expenses that self-employed people can claim, and some that they cannot claim:
| Claimable | Not Claimable |
|---|---|
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Choose the right tax software for your business
When it’s time to prepare your self-employed taxes in Canada, using the right tax software can make a huge difference. The best tax prep apps will help you maximize deductions and decrease your tax bill, leaving more money in your pocket that you can reinvest in your business.
We recommend Intuit TurboTax – it earned a Genius Rating of 4.0 thanks to its 100% accuracy guarantee, maximum refund guarantee, and the ability to import your previous year’s rating.
Want to learn more? Check out our Intuit TurboTax review.
FAQ
What is the self employed tax deadline?
The deadline to file a tax return in Canada is the same for those who are self-employed as those who are employed by a company or individual. The tax deadline is always April 30, but when April 30 falls on a weekend, the deadline is extended to the next business day. In 2025, April 30 falls on a Wednesday.
Which expenses should I track for self employed tax write-offs in Canada?
You should keep track of any expenses you incur as a result of operating your business.
Is my vehicle deductible on my self employed taxes in Canada?
If you are using your vehicle for necessary business reasons, then yes, expenses related to that vehicle can be claimed against your self employed taxable income when you file your tax return.
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