Canada self-employed & sole proprietor tax calculator 2026
A Canadian sole proprietor pays federal income tax on 2026 profit at five progressive rates: 14.5% up to C$57,375, 20.5% to C$114,750, 26% to C$177,882, 29% to C$253,414 and 33% above. Self-employed CPP adds 11.9%. Provincial tax is separate.
This calculator estimates the 2026 federal income tax and Canada Pension Plan (CPP) contributions a self-employed sole proprietor owes on net business profit. Provincial and territorial income tax is not included and is added separately.
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Result
Canada Sole proprietorship tax rates 2026
| Band or item | Rate |
|---|---|
| Up to CA$57,375 | 14.5% |
| CA$57,375 to CA$114,750 | 20.5% |
| CA$114,750 to CA$177,882 | 26% |
| CA$177,882 to CA$253,414 | 29% |
| Over CA$253,414 | 33% |
| Social contributions (CPP self-employed) | 11.9% |
Source: www.canada.ca
How federal income tax is calculated for a Canadian sole proprietor
As a sole proprietor, your business is not taxed separately from you. Your net business profit (revenue minus deductible expenses) is reported on your personal return and taxed at the same 2026 federal rates that apply to any individual. The system is progressive, so only the income that falls inside each band is taxed at that band's rate.
- 14.5% on the first C$57,375
- 20.5% on income from C$57,375 to C$114,750
- 26% on income from C$114,750 to C$177,882
- 29% on income from C$177,882 to C$253,414
- 33% on income above C$253,414
These figures cover the federal portion only. Every province and territory levies its own separate income tax with its own brackets, which this estimate excludes.
CPP contributions for the self-employed
Employees split their Canada Pension Plan contributions with their employer. A sole proprietor has no employer, so you pay both halves yourself. The calculator applies a self-employed CPP rate of 11.9% on your net self-employment earnings. This contribution is on top of the federal income tax above and funds your future CPP retirement pension. If your work is already covered elsewhere and you owe no further CPP, you can set the contribution to none so only income tax is estimated.
Worked example: C$90,000 of net profit
Suppose your sole proprietorship earns C$90,000 in net profit for 2026.
Federal income tax:
- First C$57,375 at 14.5% = C$8,319.38
- Remaining C$32,625 (from C$57,375 to C$90,000) at 20.5% = C$6,688.13
- Federal tax = C$15,007.50
CPP (self-employed): 11.9% of C$90,000 = C$10,710.00
Combined federal tax plus CPP: C$15,007.50 + C$10,710.00 = C$25,717.50, an effective rate of about 28.6% before any provincial tax. Because Canada is progressive, none of this profit reaches the 26% or higher federal bands, which only begin above C$114,750.
What this estimate does and does not include
The result reflects federal income tax and self-employed CPP on your stated net profit. It does not add provincial or territorial income tax, which varies by where you live and can be substantial. It also does not model personal credits, deductions beyond your net profit figure, or instalment timing. Treat the number as a planning estimate and confirm your final liability with the Canada Revenue Agency or a qualified professional.
Frequently asked questions
How much federal tax does a Canadian sole proprietor pay in 2026?
Federal tax follows progressive rates on net profit: 14.5% up to C$57,375, 20.5% to C$114,750, 26% to C$177,882, 29% to C$253,414, and 33% above C$253,414. Provincial tax is charged separately.
What is the CPP rate for a self-employed person?
A self-employed sole proprietor pays the full Canada Pension Plan contribution of 11.9% on net self-employment earnings, covering both the employee and employer shares.
Does this calculator include provincial income tax?
No. It estimates federal income tax plus 11.9% self-employed CPP only. Provincial and territorial income tax has its own brackets and must be added separately depending on where you live.
How much would a sole proprietor owe on C$90,000 of profit?
About C$15,007.50 in federal income tax plus C$10,710.00 in CPP at 11.9%, totalling roughly C$25,717.50 federally, or about 28.6% before provincial tax.
At what income does the top 33% federal rate start?
The top federal marginal rate of 33% applies to taxable income above C$253,414 in 2026. Income below that is taxed at the lower 14.5%, 20.5%, 26% and 29% band rates.
Is a sole proprietorship taxed separately from the owner?
No. A Canadian sole proprietorship is not a separate taxpayer. Its net profit is reported on your personal return and taxed at the individual federal rates, then CPP of 11.9% applies.
Official sources
- Canada Revenue Agency (CRA) — Corporate & personal income tax