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Free tool · 2026 tax year

Self-employed tax calculator for BC and Alberta

In 2026, your self-employed profit is your sales, less any GST you collect, minus business expenses, the business share of your vehicle and a home office. That profit is taxed at your usual rates, plus both halves of CPP (11.9%). File by June 15, 2027, but pay by April 30, 2027.

2026 ratesBC and AlbertaRuns in your browserSummary free, no sign-upSources checked 28 Oct 2026Estimate only

Try an exampleOne click fills the form. Change any number after.

Is this the right calculator? Drive for an app: the rideshare and delivery calculator. Rent out property: the rental income calculator. Only a job, pension or investments: the income tax calculator.

Your business in 2026

Balance owing $14,784Set aside 24% of each paymentWhy?

That province taxes all your 2026 income, wherever your clients are. Other provinces aren't covered.
What: everything customers paid you for 2026 work, before any costs, including the GST you charged (Form T2125, amount 3A). Where: your invoices or sales report, payment app or bank deposits, and any T4A slip with fees in box 048. Example: 75,000 of fees + 3,750 GST = 78,750. Common mistake: leaving out cash and e-transfers, or entering the amount left after expenses. Not registered for GST/HST? Enter what customers paid you and leave the GST boxes at 0.
What: the GST on your 2026 invoices (T2125, amount 3B). Where: line 105 of your GST returns, or your invoices. Example: 5% of 75,000 = 3,750. Common mistake: entering the GST you paid on costs here.
What: your input tax credits. Where: line 108 of your GST returns. Blank: estimated as 5/105 of the costs that usually carry GST. Common mistake: claiming GST on insurance, interest or wages, which carry none.

Enter 2026 amounts (the return you file in 2027), GST included where you paid it. Each box says what it is, where to find the number and a common mistake. Leave anything that doesn't apply at 0.

Business expenses (Form T2125 lines)The costs of earning your business income
What: ads, a website listing, flyers, finder's fees. Where: receipts and card statements. Example: 100 a month = 1,200. Common mistake: the cost of building a website, which can be capital.
What: meals with clients and meals while travelling for work. Enter the full bill; 50% is deducted. Example: 1,600 → 800 deducted. Common mistake: your own everyday lunches, which don't count.
What counts as a meal or entertainment, and what doesn't

Counts, at 50%

  • Meals and drinks with a client or supplier to talk business
  • Your meals while travelling for work or at a conference
  • Tickets to an event you take a client to

Doesn't count

  • Your own lunch on an ordinary workday
  • Dues for a club whose main purpose is dining, recreation or sport
  • The part of a bill that isn't reasonable

Full cost, not 50%, when you bill the meal to the client and show it on the invoice, or for up to six staff parties a year open to all your employees at one location.

What: liability, professional and equipment insurance. Where: the policy declaration page. Example: 900. Common mistake: adding car or home insurance here; they go in the vehicle and home office boxes.
What: business account fees, card processing fees and interest on business loans. Example: 25 a month = 300. Common mistake: interest on personal loans or on overdue income tax.
What: stationery, printer ink, postage, and supplies used up on the job. Example: 600. Common mistake: a laptop, desk or chair: they're capital, claimed as CCA (left out here).
What: accounting, bookkeeping, legal and consulting fees for the business, including preparing your tax and GST returns. Example: 1,500. Common mistake: legal fees to buy equipment, which go into its cost.
What: an office, studio, shop or storage unit outside your home. Example: 400 a month = 4,800. Common mistake: your home rent: that goes in the home office box below.
What: the business part of your cellphone plan and internet, or a separate business line in full. Example: half of 160 a month = 960. Common mistake: the basic monthly rate of a home landline, which isn't deductible.
What: flights, trains, taxis, transit and hotels for business trips. Example: 2,500. Common mistake: putting travel meals here; enter them under meals, so the 50% rule applies.
What: other self-employed people you pay to do part of the work. Where: their invoices. Example: 6,000. Common mistake: paying someone you control like an employee; that may be employment, with payroll rules.
What: employees' gross pay and your share of their CPP and EI. Where: your payroll records and T4 summary. Example: 12,000. Common mistake: money you took out for yourself: drawings aren't wages.
What: city business licences, trade licences, and dues to a trade or professional association. Example: 400. Common mistake: golf or fitness club dues, which aren't deductible.
What: monthly or yearly software, cloud storage and design or bookkeeping subscriptions. Example: 200 a month = 2,400. Common mistake: software you bought outright, which is CCA (Class 12, left out here).
What: anything else you spent to earn the income, such as courses to keep up your skills, delivery and freight, or small repairs to equipment. Example: 500. Common mistake: tuition at a college or university, which isn't a business expense.
What counts as a business expense, and what doesn't

Counts

  • Reasonable costs you paid to earn the business income
  • The business share of a cost you also use personally, such as a phone
  • Fees to prepare your business tax and GST returns
  • Wages to your child or spouse for real work, at a reasonable rate

Doesn't count

  • Most fines and penalties, and interest on overdue tax
  • The personal share of any cost, and ordinary clothing
  • Money you pay yourself (drawings) and your own income tax
  • Computers, furniture, tools and equipment that last: capital cost allowance (CCA), left out here
Vehicle used for the businessEnter the full year's costs; the business share is worked out from your kilometres
Where: your logbook: trips to clients, job sites and suppliers. Example: 18,000. Common mistake: counting the drive from home to a regular place of work as business.
Where: the odometer on December 31 minus January 1, work and personal together. Example: 24,000.

Business-use share: 0% of your vehicle costs are deducted.

Where: receipts or card statements. Example: 500 a month = 6,000.
Where: your insurance renewal. Example: 3,200. Common mistake: entering it again under business insurance.
What: oil changes, tires, brakes, repairs. Example: 2,400.
Example: Alberta registration 120. In BC it's usually part of the insurance; enter it once.
Where: your lease statement. Example: 600 a month = 7,200. Passenger vehicles: deductible lease costs are capped at $1,100 a month before tax (new 2026 leases).
What: interest only, from your lender's yearly statement. Example: 1,800. Passenger vehicles: capped at $350 a month (new 2026 loans). Common mistake: entering the whole loan payment.
What counts as a vehicle cost, and what doesn't

Counts (business share)

  • Fuel, oil and charging
  • Insurance, repairs, maintenance and tires
  • Licence and registration fees
  • Lease payments, or the interest on a vehicle loan

Doesn't count

  • Traffic and parking tickets
  • Loan principal, the part that repays the loan
  • The price of the vehicle itself: that's CCA, left out here
  • The personal share (removed for you) and trips to a regular workplace

Business parking is deductible in full: enter it under other business expenses. The $1,100 and $350 monthly caps apply to passenger vehicles; a van or pickup used mainly to carry goods or tools may not be one. The calculator flags the caps but doesn't apply them.

Home office (business-use-of-home, line 9945)Only if it's your main place of business, or used only for the business and to meet clients
What: the workspace's floor area divided by your home's total area. Example: a 150 sq ft room in a 1,000 sq ft apartment = 15. Common mistake: counting a room you also live in all day; then multiply by the hours it's used for work out of 24.
Where: your lease or rent receipts. Example: 2,400 a month = 28,800. Leave at 0 if you own.
Where: your lender's annual mortgage statement. Example: 18,000. Common mistake: the whole mortgage payment: principal isn't deductible.
Where: your utility bills. Example: 100 a month = 1,200. Common mistake: adding internet here as well as above.
Where: your policy renewal. Example: 360.
Where: your 2026 property tax notice. Example: 4,200. Owners only.
What: cleaning supplies, light bulbs, minor repairs for the whole home. Example: 900. Common mistake: renovations, which are capital.
Where: your 2025 Form T2125, Part 7: the business-use-of-home expenses you couldn't deduct last year. Example: 1,200. Most people enter 0.
What counts for a home office, and what doesn't

Counts (workspace share)

  • Rent, or mortgage interest if you own
  • Heat, electricity and water
  • Home or tenant insurance and property tax
  • Cleaning supplies and minor repairs

Doesn't count

  • Mortgage principal and the full mortgage payment
  • A space you don't meet either condition for, such as a kitchen table you work at now and then
  • More than your business earned before the home office: the rest carries forward
  • CCA on the home (left out here; it can affect the principal residence exemption)
Your job and tax already paidFrom your T4 slip and your CRA account. Gives your refund or balance owing.
Where: box 14 of your T4, your pay before deductions. Two jobs? Add box 14 from each. Example: 42,000. 0 if the business is your only income. Common mistake: your take-home pay.
Where: box 22 on your T4. Example: 4,200. Blank: we assume your employer deducted the tax on your pay alone, so the balance is what the business adds. Common mistake: entering box 16 or box 18 here.
Where: box 16 on your T4. Example: 2,291. Blank: 5.95% of your pay over $3,500. Your job's CPP counts toward the same yearly maximum as your business.
Where: box 16A on your T4. Only on pay over $74,600. Example: 416.
Where: box 18 on your T4. Example: 685. There's no EI on self-employment income unless you signed up for EI special benefits.
Where: your CRA account, under payments for 2026. Example: 4 × 9,000 = 36,000. Common mistake: including a payment toward your 2025 balance.

The numbers are worked out in your browser. Nothing you type leaves this page unless you ask for the full breakdown; then what you entered is saved with your name and email so our team can reply.

Your 2026 estimate

Estimated balance owing on your 2026 return

$14,784

Your $61,741 of business profit adds $7,853 of income tax and $6,931 of CPP in BC. Pay the balance by April 30, 2027; file by June 15, 2027.

  • Net tax owing over $3,000: instalments may apply. Your net tax owing is about $7,853. If it was also over $3,000 for 2025 or 2024, CRA expects instalments for 2026; if this happens again in 2027, plan on about $3,696 a quarter, CPP included.
Net business income$61,741Your profit for tax
CPP on self-employment$6,931Both halves
Income tax$7,853Federal and provincial
Set aside from each payment24%Tax, CPP and GST

Set-aside rate: Based on the numbers entered. Your set-aside rate changes with income, GST, CPP, RRSPs, other income and credits.

Estimate, not tax advice. General information based on 2026 figures; your return may differ.

See every line behind this numberForm T2125, both halves of CPP, income tax, instalments, what to do next

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GST: you collect it for CRA, so it isn’t income

GST you collected$3,750
GST you claim back on costs$355
GST to send CRA$3,395
  • Small supplier limit: $30,000. You must register once your taxable sales pass $30,000 in a single calendar quarter or over four calendar quarters in a row. Until then, registering is optional.
  • GST you collect isn’t income. On Form T2125 your sales include it and it comes back out, so a registrant isn’t taxed on it.
  • Net GST = GST collected − input tax credits. Claim back the GST you paid on business costs; insurance, interest and wages carry none.
  • Annual filer with a December 31 year-end? File your GST return by June 15, 2027 and pay by April 30, 2027, the same pair as your income tax.
GST registration guide GST/HST calculator

Two dates for your 2026 return, and why they differ

Pay what you owe byApril 30, 2027Interest is charged on any balance still unpaid after this date, even though your return isn't due yet.
File your return byJune 15, 2027For you, and for your spouse or common-law partner too, when either of you is self-employed.
  • The June date is for the paperwork only. Self-employed people get extra time to file, not to pay. Work out your balance in April and pay it by April 30; file the return by June 15.
  • GST follows the same pair. A sole proprietor with a December 31 year-end who files GST once a year files that return by June 15 and pays by April 30.
  • Instalments run on their own dates: March 15, June 15, September 15 and December 15. If you owe over $3,000 two years running, CRA expects instalments for the next year too.
2026 rates used in this estimate2026 tax year (return filed in 2027). From our tax engine; each figure links to its source, checked 28 Oct 2026.
2026 amounts, rates and rules used
Figure2026 valueSource, checked
CPP, self-employed11.9% (5.95% × 2) of net earnings from $3,500 to $74,600, up to $8,460.90CRA CPP rates, 28 Oct 2026
CPP2, self-employed8% (4% × 2) from $74,600 to $85,000, up to $832CRA CPP2 rates, 28 Oct 2026
Meals and entertainment50% of the cost is deductibleCRA Guide T4002, line 8523, 28 Oct 2026
Home officeWorkspace share of home costs, up to the business's net income before it; the rest carries forwardCRA Business-use-of-home, 28 Oct 2026
Vehicle lease and interest capsPassenger vehicles: lease $1,100 a month, interest $350 a month (flagged, not applied)Finance Canada, 14 Jan 2026, 28 Oct 2026
GST5% in BC and Alberta; register once taxable sales pass $30,000CRA When to register, 28 Oct 2026
InstalmentsNeeded when net tax owing is over $3,000 in 2026 and in 2025 or 2024; CPP is added to the instalment amountCRA 2026 instalment chart, 28 Oct 2026
Dates for the 2026 returnPay by April 30, 2027; self-employed file by June 15, 2027CRA important dates, 28 Oct 2026
Basic personal amounts and credit ratesFederal $16,452; BC $13,216; Alberta $22,769. Credits at 14%, 5.6% and 8%CRA 2026 rates, B.C. credits, Alberta, 28 Oct 2026
CPP and EI on a jobCPP 5.95% of pay from $3,500 to $74,600, CPP2 4% to $85,000; EI 1.63% to $68,900; Canada employment amount $1,501CRA EI, 28 Oct 2026
Federal tax brackets, 2026
Taxable incomeRate
Up to $58,52314%
$58,523 to $117,04520.5%
$117,045 to $181,44026%
$181,440 to $258,48229%
Over $258,48233%
British Columbia tax brackets, 2026
Taxable incomeRate
Up to $50,3635.6%
$50,363 to $100,7287.7%
$100,728 to $115,64810.5%
$115,648 to $140,43012.29%
$140,430 to $190,40514.7%
$190,405 to $265,54516.8%
Over $265,54520.5%
Alberta tax brackets, 2026
Taxable incomeRate
Up to $61,2008%
$61,200 to $154,25910%
$154,259 to $185,11112%
$185,111 to $246,81313%
$246,813 to $370,22014%
Over $370,22015%

Brackets: CRA 2026 federal rates, B.C. 2026 rates and Alberta 2026 rates, checked 28 Oct 2026. The same engine runs our income tax calculator.

Estimate only, general information, not tax advice. Your situation may differ; book a free 15-minute call before acting. The calculator uses the 2026 federal, BC and Alberta brackets, the basic personal and Canada employment amounts, CPP, CPP2 and EI from our income tax engine. It leaves out capital cost allowance (CCA), inventory and cost of goods sold, partnerships, incorporation, the GST quick method, EI special benefits for self-employed people, loss carry-overs, other credits and deductions, and other provinces.

Detailed report

Your 2026 business tax, line by line

From Form T2125 to your balance: business income, both halves of CPP, income tax and what to set aside, with the CRA line number where there is one and a sentence on why each figure is there. It follows every change you make above.

Line-by-line breakdown of your 2026 self-employed estimate
LineAmount
Business income (Form T2125)
Sales and fees, GST includedEverything customers paid you for 2026 (amount 3A).$78,750
GST collectedGST you collect for CRA isn’t income, so it comes back out (amount 3B).−$3,750
Business expensesThe T2125 lines you entered, with $800 of meals left out by the 50% rule.−$9,060
GST claimed back on costsEstimated input tax credits (5/105 of costs that usually carry GST). They come back from CRA, so they aren’t a cost.+$355
Home office15% of your home costs.−$4,554
Net business incomeYour profit for tax, added to any other income.$61,741
CPP on self-employment (Schedule 8)
CPP, first tier11.9% of profit from $3,500 to $74,600.$6,930.71
Employee halfThe share an employee pays on wages; its base part is a tax credit.$3,465.35
Employer halfSelf-employed people pay it too; it’s deducted from income.$3,465.35
CPP on self-employmentBoth halves, because you’re self-employed.$6,930.71
Income tax
Federal taxFrom the federal brackets, 14% to 33%, less credits.$5,370.19
BC taxFrom the BC brackets, less credits and the BC tax reduction.$2,483.23
Income tax on all your incomeOn your business profit.$7,853.43
Marginal tax rateIncome tax on your next dollar of profit (CPP is extra while you’re under the CPP maximum).21.7%
Your 2026 return
Income tax$7,853.43
CPP on self-employmentPaid with your return; nobody deducts it from business income.+$6,930.71
Estimated balance owingPay by April 30, 2027; file by June 15, 2027.$14,784.14
Instalments and set-aside
Net tax owingIncome tax minus tax deducted at source. Over $3,000 brings the instalment test; CPP isn’t part of it.$7,853
Instalments for a year like thisNet tax owing plus CPP, in four payments of about $3,696.$14,784
Set aside from each paymentIncome tax added, CPP and GST to send, divided by what customers paid you; rounded up to 24% above.23.1%

What this means

  • Out of $78,750 that customers paid, $61,741 is profit for tax. About $14,784 of it goes to income tax and CPP, leaving $46,957.
  • The $3,750 of GST you collected isn’t income: you send it to CRA, less $355 you claim back on costs.
  • Only half your meals and entertainment count: $800 of $1,600.
  • No one takes tax off business income, so it’s due with your return.

What to do next

  1. Pay $14,784 by April 30, 2027, then file by June 15, 2027. Interest runs on anything unpaid after April 30.
  2. Set aside 24% of every payment in a separate account for income tax, CPP and GST.
  3. Plan for instalments of about $3,696 on March 15, June 15, September 15 and December 15, 2027, if CRA sends reminders.
  4. File your GST return: annual filers with a December 31 year-end file by June 15, 2027 and pay by April 30, 2027.
  5. Keep receipts for six years and how you measured the 15% home office.
  6. Want it done for you? Bookkeeping through the year and your 2026 return.

Want your books and return handled? See the business membership.

Key figures

Key figures for 2026

The rules and rates for self-employment income in the 2026 tax year (returns filed in 2027), in BC and Alberta.

Self-employed tax figures for 2026, BC and Alberta
FigureRule or rateSource, checked
Income tax on business profitYour marginal rate: 14% to 33% federal, plus 5.6% to 20.5% in BC or 8% to 15% in AlbertaCRA, gov.bc.ca, alberta.ca 2026 rates; 28 Oct 2026
CPP on self-employment11.9% of net earnings from $3,500 to $74,600 (up to $8,460.90), plus 8% CPP2 from $74,600 to $85,000 (up to $832); shared with any job's CPPCRA CPP and CPP2 rates; CRA line 22200; 28 Oct 2026
GST you collectNot income for a registrant: included in sales at T2125 amount 3A, taken back out at 3BCRA Guide T4002, chapter 2; 28 Oct 2026
Meals and entertainment50% of the lesser of the cost and a reasonable amount, including meals while travellingCRA Guide T4002, line 8523; 28 Oct 2026
Home officeMain place of business, or used only for the business and to meet clients. Can't create or increase a loss; the rest carries forwardCRA Business-use-of-home expenses; T4002 line 9945; 28 Oct 2026
VehicleBusiness km ÷ total km × costs. Passenger vehicles: lease up to $1,100 a month, interest up to $350 a monthCRA Guide T4002, line 9281; Finance Canada 14 Jan 2026; 28 Oct 2026
GST registrationRequired once taxable sales pass $30,000 in one calendar quarter or over four in a rowCRA When to register; 28 Oct 2026
InstalmentsNet tax owing over $3,000 in 2026 and in 2025 or 2024. CPP isn't in the test but is added to the paymentsCRA Who has to pay; CRA 2026 instalment chart; 28 Oct 2026
Dates for the 2026 returnPay by April 30, 2027. File by June 15, 2027 if you or your spouse or partner are self-employedCRA Important dates; 28 Oct 2026
Method

How it's calculated

The steps follow Form T2125, Statement of Business or Professional Activities, CRA Guide T4002 and Schedule 8 for CPP.

  1. Sales. Everything customers paid you for the year, GST included. If you're registered, the GST you collected comes off: it belongs to CRA.
  2. Expenses. The T2125 lines you enter are added up, with meals and entertainment at 50%. If you're registered, the GST you paid on costs (input tax credits, entered or estimated at 5/105 of the costs that usually carry GST) comes off them, because CRA gives it back.
  3. Vehicle. Fuel, insurance, repairs, licence, lease and loan interest, times business km ÷ total km. If business km is more than total km, 100% is used and the calculator asks you to check.
  4. Home office. The workspace share of rent, mortgage interest, utilities, insurance, property tax and maintenance, plus any amount carried forward from 2025. It's allowed only up to the profit left after the other expenses; the rest is carried forward to 2027.
  5. Net business income. Sales minus all of the above. A loss reduces your other income, but never the CPP on a job.
  6. CPP. 11.9% of your profit inside the CPP band, sharing the $3,500 exemption and the $74,600 maximum with any job, plus 8% CPP2 up to $85,000. Half is deducted from income; the base part of the other half is a credit.
  7. Income tax. Your 2026 tax is worked out with the same engine as our income tax calculator, once with your job alone and once with the business added. The difference is the tax the business adds.
  8. Refund or balance owing. Income tax on everything plus CPP on the business, minus T4 box 22, instalments paid and any CPP or EI your job overpaid.
  9. Instalments and set-aside. Net tax owing is income tax minus box 22. Over $3,000 brings the instalment warning, and the instalment amount adds your CPP. The set-aside % is income tax added, CPP and GST to send, divided by what customers paid you.
2026 figures, checked 28 Oct 2026
Worked examples

Two worked examples for 2026

Example 1: a graphic designer in Surrey, working from home

You're a self-employed designer registered for GST, with no other job. Clients paid you $78,750: $75,000 of fees plus $3,750 of GST, which isn't income. Expenses come to $9,060: advertising $1,200, client meals of $1,600 at 50% ($800), insurance $900, bank charges $300, office supplies $600, accounting $1,500, phone and internet $960, memberships $400 and software $2,400. You claim back about $355 of GST on them.

Your studio is 150 of your apartment's 1,000 sq ft: 15% of rent ($28,800), hydro ($1,200) and tenant insurance ($360) is $4,554, well under your profit, so it's all allowed. Net business income is $61,741. CPP on it is $6,931 (both halves) and income tax is $7,853 ($5,370 federal and $2,483 BC), leaving $46,957.

Example 1: Surrey graphic designer, home office, 2026
LineAmount
Sales and fees, GST included$78,750
GST collected (not income)−$3,750
Expenses, meals at 50%−$9,060
GST claimed back on costs+$355
Home office, 15% of $30,360−$4,554
Net business income$61,741
CPP, both halves$6,931
Income tax$7,853
Balance owing, due April 30, 2027$14,784
GST to send CRA$3,395

Nothing was deducted at source, so all $14,784 is due by April 30, 2027, even though the return can wait until June 15. Net tax owing of $7,853 is over $3,000, so instalments are likely for 2027: about $3,696 a quarter, CPP included. Setting aside about 24% of every payment covers income tax, CPP and GST.

Example 2: a handyman in Edmonton with a van

You run a handyman business in Edmonton, registered for GST, with no other job. Customers paid $98,700: $94,000 of work plus $4,700 of GST. You drove 18,000 of the van's 24,000 km for the business, a 75% share of $13,520 of van costs (fuel $6,000, insurance $3,200, repairs $2,400, registration $120, loan interest $1,800): $10,140.

Other expenses are $15,230: advertising $800, meals of $400 at 50% ($200), liability insurance $1,800, bank charges $240, supplies used on jobs $3,500, accounting $900, phone $1,080, a subcontractor $6,000, licences $350 and software $360. You claim back about $911 of GST. Net business income is $69,541. CPP is $7,859 and income tax is $9,938 ($6,750 federal and $3,188 Alberta), leaving $51,744.

Example 2: Edmonton handyman with a van, 2026
LineAmount
Sales, GST included$98,700
GST collected (not income)−$4,700
Expenses, meals at 50%−$15,230
Van, 75% of $13,520−$10,140
GST claimed back on costs+$911
Net business income$69,541
CPP, both halves$7,859
Income tax$9,938
Balance owing, due April 30, 2027$17,797
GST to send CRA$3,789

The van carries tools and materials, so it may not be a passenger vehicle and the lease and interest caps may not apply; at $1,800 of interest it's under the cap either way. Setting aside about 22% of every payment covers income tax, CPP and GST. For more on running a trade business, see trades and construction.

Expenses

What you can deduct, line by line

The T2125 lines this calculator uses, from CRA Guide T4002. A cost is deductible when you paid it to earn business income and it's reasonable. Keep the receipts: CRA can refuse expenses you can't support.

Form T2125 expense lines used here
ExpenseLineWatch out for
Advertising8521Canadian-content rules for print and broadcast ads
Meals and entertainment8523Only 50%, including meals while travelling
Insurance8690Car insurance goes with the vehicle; home insurance with the home office
Interest and bank charges8710Not interest on personal loans or overdue tax
Office expenses and supplies8810, 8811Desks, chairs and computers are capital (CCA)
Professional fees8860Fees to buy a capital asset go into its cost
Rent for a business space8910Home rent goes on line 9945 instead
Phone and internet9220Business share only; not a home phone's basic rate
Travel9200Meals on the trip are still 50%
Subcontracts8360Someone you control like an employee may be one
Salaries and wages9060Not to yourself; your drawings aren't wages
Licences and memberships8760No dining, recreation or sports club dues
Software and other expenses9270Software bought outright is Class 12 CCA
Vehicle9281Business km share only; keep a logbook
Home office9945Can't create or increase a loss

Source: CRA Guide T4002, chapters 2 and 3, checked 28 Oct 2026.

The home office rule, step by step

You can claim a workspace in your home if it's your main place of business, or if you use it only for the business and regularly meet clients, customers or patients there.

Measure the workspace's share of your home's floor area. If the room is also used for living, multiply by the hours it's used for work out of 24, and reduce the claim if you work only part of the week. Apply that share to rent or mortgage interest, utilities, home insurance, property tax and maintenance.

The claim can't be more than your profit before it, so it can't create or increase a loss. Whatever you can't use this year is carried forward and added to next year's claim, as long as you still meet one of the two conditions.

GST and your income

Once you're registered, the GST you charge isn't your money: it's collected for CRA. Form T2125 starts from sales including GST (amount 3A) and takes the GST back out (3B), so it isn't taxed as income.

The GST you pay on business costs comes back as input tax credits. You then deduct your costs without that GST, so it isn't claimed twice. Insurance, interest and wages carry no GST, so there's nothing to claim on them. Not registered? You don't charge GST, and the GST you pay is simply part of the cost.

When a job and a business share CPP

CPP has one yearly band for all your earnings. The first $3,500 is exempt, the first tier stops at $74,600 and CPP2 stops at $85,000. Your employer deducts CPP on your pay first; the business pays both halves on whatever room is left. With a $60,000 job, a business profit of $30,000 adds $1,737 of CPP and $832 of CPP2. With an $85,000 job, it adds none. A business loss never reduces the CPP on your job.

Scope

Who this is for and what it leaves out

Who this is for

  • Sole proprietors in BC or Alberta who report business or professional income on Form T2125: consultants, designers, trades, tutors, coaches and freelancers.
  • People with a job and a business on the side who want to know what the business adds and how CPP is shared.
  • Anyone planning what to set aside, whether instalments apply and whether to register for GST.

What it leaves out

  • Capital cost allowance (CCA) on equipment, computers, vehicles and your home; inventory and cost of goods sold.
  • Partnerships, and businesses run through a corporation. Thinking of incorporating? Read when to incorporate and try the salary vs dividend calculator.
  • EI special benefits for self-employed people (an opt-in program with its own premiums), the GST quick method and loss carry-overs.
  • Other provinces, RRSP and other deductions and credits (use the income tax calculator), and the driving and rental rules covered by our other calculators.

Sources, checked 28 Oct 2026

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Questions

Self-employed tax, answered

How much tax do I pay when I'm self-employed in BC or Alberta?

Your profit, which is your sales minus any GST you collect and your business expenses, is added to your other income and taxed at your usual federal and provincial rates, plus both halves of CPP. A Surrey designer with $61,741 of profit and no other income pays about $7,853 of income tax and $6,931 of CPP for 2026. Nobody deducts tax from business income, so it's usually due with your return.

Do self-employed people pay both halves of CPP?

Yes. In 2026 you pay 11.9% of net self-employment earnings between $3,500 and $74,600, up to $8,460.90, plus 8% CPP2 on earnings from $74,600 to $85,000, up to $832. Half is deducted from your income as the employer's share, and the base part of the other half is a tax credit.

I have a job too. Do I still pay CPP on my business income?

Only on the room your job hasn't used. The $3,500 exemption and the $74,600 and $85,000 maximums are shared between your job and your business. If your pay is $85,000 or more, your employer has already deducted the maximum CPP and CPP2, so there's none on the business. A business loss can't reduce the CPP on your job.

Can I claim a home office when I'm self-employed?

Yes, if the workspace is your main place of business, or you use it only for the business and regularly meet clients there. Claim the workspace share of rent or mortgage interest, utilities, home insurance, property tax and maintenance. The claim can't create or increase a business loss; anything you can't use is carried forward to next year.

How much of a business meal can I deduct?

Generally 50%. CRA limits food, drinks and entertainment to half of the lesser of what you paid and a reasonable amount, and that includes your meals while travelling for work. Exceptions include meals you bill to a client and show on the invoice, and up to six staff events a year open to all employees at one location.

Is the GST I collect part of my income?

No, if you're registered. The GST you charge belongs to CRA: on Form T2125 you start from sales including GST and take the GST back out. The GST you pay on business costs comes back as input tax credits, so you deduct your costs without it. If you aren't registered, you don't charge GST and there's nothing to take out.

When do I have to register for GST?

Once your taxable sales pass $30,000 in a single calendar quarter or over four calendar quarters in a row. Until then you're a small supplier and registering is optional, though registering lets you claim back the GST on your costs. Rideshare drivers are different: they register from their first paid trip.

When is my 2026 self-employed tax return due?

You have until June 15, 2027 to file, but any balance owing is due by April 30, 2027. Interest is charged on anything unpaid after April 30, so work out your tax in April and pay it then. The June 15 filing date also applies to your spouse or common-law partner's return.

Do I have to pay tax instalments if I'm self-employed?

If your net tax owing is more than $3,000 in 2026 and was also more than $3,000 in 2025 or 2024, CRA expects quarterly instalments on March 15, June 15, September 15 and December 15. Net tax owing is your income tax less tax deducted at source. CPP isn't part of that test, but it is added to the instalments you pay.

Free calculators for 2026

Estimates with 2026 rates for BC and Alberta. Summaries free, no sign-up.

Income tax calculator2026 federal and BC or Alberta tax, CPP, EI, your refund or balance owing.Rental income calculatorNet rent after expenses, personal use and co-owner shares, and the tax it adds.Rideshare and delivery calculatorUber, Lyft and delivery: vehicle costs, CPP, GST and what to set aside.Canada Child Benefit calculatorCCB for July 2026 to June 2027, plus the BC or Alberta family benefit.EI benefits calculatorWhether you qualify, your weekly EI, and how many weeks, in BC or Alberta.RRSP tax savings calculatorHow much tax an RRSP contribution could save at your income.Salary vs dividend calculatorFor incorporated owners: salary, dividends or a mix, and the tax on each.GST/HST and PST calculatorAdd or remove GST, HST and BC PST on any amount.Home office deduction calculatorYour work-space share, which costs count for employees or the self-employed, and the 2026 deduction.Should I incorporate? calculatorSole proprietor vs corporation for 2026: tax and CPP now, cash in hand, and what stays in the company.Restaurant food cost calculatorFood and beverage cost %, prime cost with labour, and a menu price from plate cost.Short-term rental profit calculatorNightly rate and nights booked to profit after fees, cleaning, PST, MRDT or levy, and income tax.Insurance needs calculatorA general estimate of the life insurance a family might need, less the cover and savings in place.Pay and tax dashboardYour 2026 pay at a glance: tax, CPP, EI, take-home per month and paycheque, and an RRSP.

See all free tools · Have us file your 2026 return