Self-Employment Tax Calculator

Estimate income tax plus both halves of CPP on your self-employment income, and the percentage to set aside for CRA instalments.

Tax data last reviewed: 2026-06-26. Current tax year on file: 2026. Figures are sourced from canada.ca (CRA) and provincial finance ministries and are kept current by BOMCAS Canada.

When you work for yourself, there is no employer withholding tax on your behalf and no employer paying half of your CPP. You are responsible for the full amount — which is why setting money aside through the year matters so much. This calculator estimates your income tax and the full (employee plus employer) CPP contribution on your net self-employment income.

It also shows a suggested set-aside rate so you can park the right share of every payment and avoid a shock at filing time.

How it works

Understanding the numbers

Double CPP for the self-employed

Employees split CPP with their employer; the self-employed pay both portions, so the contribution is roughly double. The calculator applies the full rate up to the annual maximum, including CPP2 where applicable.

Net income, not gross

Enter your income after business expenses. Legitimate expenses — home office, vehicle, supplies, professional fees — reduce the figure you are taxed on, so good bookkeeping directly lowers this number.

Instalments

If you owe more than $3,000 in a year, the CRA generally expects quarterly instalments. The set-aside rate shown helps you save the right amount as you go.

Need this done for you? BOMCAS Canada prepares returns and provides tax planning for individuals and businesses in Sherwood Park, Edmonton and across Alberta. Call 780-667-5250 or email info@bomcas.ca.

Guide

Self-employment tax calculator for Alberta sole proprietors and freelancers

Self-employment tax for Sherwood Park's small businesses

Sherwood Park and Strathcona County are home to a large community of contractors, tradespeople, consultants and online sellers who work for themselves. When you are self-employed there is no employer withholding tax or splitting your CPP, so the full burden falls on you — and it lands at filing time unless you have set money aside. This calculator estimates the income tax plus the full (employee and employer) CPP you will owe on your net self-employment income, and suggests a percentage to hold back from every payment.

Because Alberta has no provincial sales tax, the only sales tax a sole proprietor here collects is the 5% federal GST, and only once revenue crosses the registration threshold. That keeps compliance simpler than in PST or HST provinces, but the income-tax and CPP side still needs careful planning.

Net income, expenses and instalments

The figure you are taxed on is your net income — revenue minus legitimate business expenses such as a home office, vehicle costs, supplies, software and professional fees. Good bookkeeping directly lowers this number, which is why we encourage every self-employed client to track expenses properly throughout the year rather than scrambling at tax time.

If you owe more than the CRA's threshold in a year, you will generally be asked to pay quarterly instalments going forward. The set-aside percentage this calculator suggests helps you save the right amount as you earn, so an instalment notice never catches you short.

From side hustle to incorporation

Many businesses start as a sole proprietorship and later incorporate once profits exceed what the owner needs to draw personally. Incorporation can unlock tax deferral and the low Alberta small-business rate, but it adds filing obligations. We help Sherwood Park and Edmonton entrepreneurs decide when incorporation makes sense and handle the transition, including the corporate calculator on this site for modelling the after-incorporation tax.

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Step by step

How to use the self-employment tax calculator

To estimate your self-employment tax:

Enter your net self-employment incomeType your revenue after deducting business expenses.
Select your province and yearAlberta is the default; choose another province if you file there.
Review tax, CPP and set-aside rateSee your estimated income tax, full CPP contribution, and the share of income to reserve for the CRA.

Answers

Frequently Asked Questions

Once your taxable revenue exceeds $30,000 over four consecutive quarters you must register for and charge GST. Below that threshold it is optional. In Alberta there is no provincial sales tax, so GST at 5% is the only sales tax you collect.

It depends on your income and province, but many Alberta sole proprietors set aside 25-30% of net income for income tax and CPP combined. The calculator's set-aside rate gives you a figure tailored to the numbers you enter.

You can deduct the employer half of your CPP contributions and claim a credit for the employee half, which softens the cost. BOMCAS Canada handles this automatically when preparing self-employed returns.

Keep all invoices, receipts and a mileage log, and separate business and personal banking. Our bookkeeping service can manage this for you so your year-end is straightforward and fully supported.

Once your taxable revenue exceeds $30,000 over four consecutive calendar quarters, GST registration becomes mandatory and you must charge 5% GST. Below that you may register voluntarily to recover GST on your business purchases. There is no provincial sales tax in Alberta, so GST is the only sales tax involved.

It depends on your income, but many Alberta sole proprietors reserve roughly 25–30% of net income to cover income tax and both halves of CPP. The calculator tailors the set-aside rate to the figures you enter so you are not guessing.

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These calculators provide estimates for general information only and do not constitute tax, accounting, or financial advice. Figures are based on published federal and provincial/territorial rates and are updated periodically. For advice specific to your situation, contact BOMCAS Canada. These calculators provide good-faith estimates for planning only and do not constitute tax advice or a filing. For advice specific to your situation, contact BOMCAS Canada at 780-667-5250 or info@bomcas.ca.

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