How Much Should Self-Employed People Save for Taxes?
How much of each payment to set aside for income tax, CPP and GST/HST, by province.
The short version
- For income tax plus CPP on net profit, most self-employed Canadians need to set aside roughly 20% to 30% of profit, more at higher incomes and in higher-tax provinces.
- Ontario, 2026, no other income: about 19% of profit at $30,000, 23% at $50,000, 27% at $75,000, 28% at $100,000 and 32% at $150,000.
- That's a percentage of profit, not of sales. On revenue, the number is lower if you have real expenses.
- Registered for GST/HST? Every dollar of GST/HST you collect is CRA's. Set it aside separately, in full, minus your input tax credits.
- Have a T4 job too? Your profit sits on top of your salary, so use your marginal rate plus CPP for the side income.
How Much Should Self-Employed People Save for Taxes?
Every self-employed person learns the same lesson once: the money in the account in April isn't all yours. Some learn it from a $9,000 bill they can't pay. Here's how to work out your number before CRA does, and a system that makes it painless.
The Numbers, by Province
Income tax plus both halves of CPP as a share of net self-employment profit, for 2026, with no other income and basic credits only:
| Net profit | Ontario | British Columbia | Alberta | Nova Scotia |
|---|---|---|---|---|
| $30,000 | 18.7% | 15.9% | 16.4% | 19.7% |
| $50,000 | 23.0% | 22.4% | 22.4% | 26.6% |
| $75,000 | 27.0% | 26.2% | 26.6% | 31.5% |
| $100,000 | 28.3% | 27.3% | 28.1% | 33.4% |
| $150,000 | 31.8% | 29.8% | 29.9% | 35.9% |
Calculated with our self-employed tax calculator. Your own credits, RRSP contributions and other income will move these. Where they come from is explained on how self-employment tax works.
If You Also Have a Job
Side-business profit is taxed at your marginal rate, because your salary already used the low brackets. Add CPP of 11.9% on the side profit until your combined earnings reach the $74,600 CPP ceiling (your employer's CPP on your T4 counts toward it). Someone earning $70,000 at a job in Ontario should set aside 35% to 40% of side profit, not 20%. More on side hustle taxes.
What is your set-aside percentage?
Tell the assistant your expected profit, any other income, your province and whether you charge GST/HST. It gives you one percentage to move from every payment, and the instalment dates.
The System That Works
- Open a second bank account and call it something unambiguous, like “CRA money.”
- Every time a client pays, move your percentage of the profit share (or a simple percentage of the deposit) into it the same day. Plus all GST/HST collected, if you're registered.
- Pay instalments from it on March 15, June 15, September 15 and December 15 once CRA asks for them (see tax instalments).
- Recheck in September. If the year is running hotter than planned, bump the percentage.
- In April, pay the balance from the account. Anything left over is yours.
A high-interest savings account or a TFSA works for the holding account; the interest is a small reward for discipline.
Lower the Number Legally
- Claim every legitimate expense: see business expense deductions.
- Track vehicle and home office properly: vehicle expenses and home office.
- An RRSP contribution cuts income tax at your marginal rate.
Get your GST/HST set up right the first time
The GST/HST SmartFile runs both $30,000 tests on your sales, compares the quick method with the regular method, and fills in form GST74 if the quick method wins.
Behind Already?
File on time anyway, pay what you can, and set up a payment arrangement; see paying CRA late. Then start the system with the next deposit. Before you file, Return Check reviews the T2125 for missed expenses that would shrink the bill.
Set-Aside Questions
What percentage should I save for taxes if I am self-employed?
Roughly 20% to 30% of net profit for income tax and CPP in most provinces at middle incomes, more at higher incomes or with another job. For example, about 23% in Ontario at $50,000 of profit and 28% at $100,000, for 2026.
Do I save on revenue or on profit?
Tax is based on profit. Saving a percentage of profit is accurate; saving a smaller percentage of revenue is simpler if your expenses are steady.
How much should I save if I have a full-time job and a side business?
More, because the side profit is taxed at your marginal rate plus CPP. With a mid-level salary, 35% to 45% of the side profit is often needed.
Should I set aside GST/HST separately?
Yes. If you are registered, all the GST/HST you collect, less input tax credits, belongs to CRA and is due with your GST/HST return.
Percentages calculated with our 2026 rules engine (CRA T4127 formulas and provincial budgets) for net self-employment income only, basic credits; see our sources. Checked October 2026.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.