How Much Tax to Set Aside When Self-Employed in Canada (2026): Your Number, Not a Flat 25%

Quick answer: as of October 2026, most self-employed Canadians should set aside roughly 24% to 31% of net self-employment income to cover 2026 income tax and both halves of CPP. Where you land depends on how much you earn, which province you live in, and the fact that you pay both halves of CPP. The 2026 balance is due April 30, 2027, and if you pay instalments, the last one for 2026 is due December 15, 2026.

Last verified October 2026: 2026 rates, brackets, CPP figures and dates below were checked against canada.ca on October 7, 2026 (pages listed under Sources).

A flat "save 25–30%" is not wrong, exactly. It is a guess wearing a suit. At $50,000 in Ontario it is roughly right. At $130,000 it can leave you thousands of dollars short on April 30, the exact moment you least want a surprise. Let's replace the guess with your number.

Why everyone says "25–30%"

Because it is safe to say and hard to be specifically wrong about. Most guides for Canadian freelancers hand you the same range, with no province, no income level, and no mention of why the percentage climbs as you earn more. The range is a real average across real freelancers. The trouble is that nobody is average in the way an average needs them to be, and the error is not symmetric. If your true number is 24% and you saved 25%, April feels like a small refund. If your true number is 31% and you saved 25%, you owe a four-figure gap, all at once.

So the honest answer to "what percentage should I save?" is: it depends on three things, and all three are knowable.

The three things your real number depends on

1. Your income level

Canada's income tax is progressive. For 2026, the federal rate is 14% on your first $58,523 of taxable income, 20.5% from there to $117,045, and 26% from $117,045 to $181,440, with higher rates above that. Every dollar past a threshold is taxed at the higher rate, so your overall percentage drifts upward as your income grows. A set-aside rule that ignores your income level ignores the basic shape of the system.

2. Your province

Provincial tax is its own progressive ladder stacked on the federal one, and the ladders differ a lot. Ontario starts at 5.05% on the first $53,891 for 2026. Quebec's rates run materially higher, and Quebec freelancers pay into QPP rather than CPP. Two freelancers with identical income in different provinces can be several thousand dollars apart on the same April 30 bill.

3. CPP, both halves

This is the one that catches people in year one. An employee pays 5.95% into CPP and their employer matches it. When you are self-employed, you pay both. For 2026 you contribute 11.9% of your net self-employment earnings between $3,500 and $74,600, to a maximum of $8,460.90, plus a second contribution (CPP2) of 8% on earnings between $74,600 and $85,000, to a maximum of $832. On a $90,000 year, CPP alone is roughly nine thousand dollars that no income-tax bracket table warned you about. It is not a penalty; it is your pension. But it has to be in the jar. (Work out your exact CPP, both halves, base plus CPP2, here.)

A note on 2027 CPP (not in the 2026 maths)

From January 1, 2027, Bill C-30 lowers the base CPP contribution rate from 4.95% to 4.75% each for employees and employers, or from 9.9% to 9.5% for the self-employed (Library of Parliament legislative summary; Royal Assent June 18, 2026 per LEGISinfo). That changes what you set aside from income earned in 2027, not the 2026 numbers in this guide. As of October 7, 2026 the CRA had not yet published the 2027 earnings ceilings or maximum contributions, so treat any 2027 maximum you see quoted as a projection until it does. Our CPP 2027 guide tracks the change.

Your number, worked out honestly

Here is the 2026 math for a freelancer in Ontario at three income levels. These are estimates of income tax (federal + provincial, including Ontario's surtax and health premium) plus CPP, assuming your only income is self-employment income and claiming only the basic personal amounts ($16,452 federal; $12,989 Ontario). Your return will differ: other deductions, RRSP contributions and credits all move the number. The point is the shape.

Net self-employment income (ON, 2026)	Estimated tax + CPP	Your real set-aside	Flat 25% saves	The gap
$50,000	≈ $11,900	≈ 24%	$12,500	≈ $600 over — fine
$90,000	≈ $26,400	≈ 29%	$22,500	≈ $3,900 short
$130,000	≈ $40,200	≈ 31%	$32,500	≈ $7,700 short

Read the right-hand column slowly. At $50,000, the flat rule quietly over-saves and you will be fine. At $90,000, it leaves you almost four thousand dollars short. At $130,000, the shortfall is the price of a used car. The flat rule does not fail loudly; it fails in April, all at once, after a year of feeling responsible.

This table is, more or less, why VRITTI's tax estimate works the way it does. We started with the same flat 25% everyone recommends, ran the real progressive math for every province and territory with both halves of CPP, and watched the flat rule under-save the people earning the most. So VRITTI, a Canadian iOS app for self-employed people, works out your actual marginal picture instead. VRITTI sets this aside for your province as income lands, earmarking the right slice of each payment in the app. It is coming soon: join the waitlist. Until then, the free tax set-aside calculator gives you the same estimate.

The mechanism matters more than the math

Here is the part most guides skip: when you set the money aside matters as much as how much.

The failure is rarely "I calculated 25% instead of 29%." It is "I meant to move money over in March and it was already gone." A percentage you apply once a quarter, from whatever happens to be left, is a wish. A percentage you set aside the day a payment lands is a system.

The move: every time a client payment arrives, put your percentage in a separate account before you touch the rest. Same day. That slice was never yours to spend. After a few months it is boring, and boring is what you want your tax life to be. April stops being a reckoning and becomes a transfer.

What the set-aside is for: key dates as of October 2026

For 2026 income, these are the dates still ahead:

Date	What it is
December 15, 2026	The last 2026 instalment, if you are required to pay instalments. See the December 15 instalment guide.
April 30, 2027	Your 2026 balance owing is due, even though a self-employed filer's return is not due until June 15. Interest starts the next day on anything unpaid.
June 15, 2027	The filing deadline for your 2026 return.

The instalment system catches up with most successful freelancers eventually: once your net tax owing is more than $3,000 ($1,800 in Quebec) in the current year and in either of the two previous years, the CRA expects you to pay quarterly, on March 15, June 15, September 15 and December 15. If a required instalment is late or short, the CRA charges instalment interest at its prescribed rate, compounded daily: 7% for October 1 to December 31, 2026 (Canada Revenue Agency). How that works, including the credit you earn for paying early, is in our instalment-interest guide. The first reminder letter rattles people, but if you have been setting money aside all year it changes nothing: the money is already there, and the letter is a schedule for handing it over. (More on that letter in our instalment reminder guide.)

What NOT to count: GST/HST is not yours

If you are registered for GST/HST, which becomes mandatory once your taxable sales pass $30,000 over four consecutive calendar quarters, the tax you collect on invoices is not income and not savings. You are holding it in trust for the CRA. It does not belong in your set-aside percentage, and it cannot be spent "for now."

Keep it in its own compartment: your income-tax set-aside is your money, earmarked; collected GST/HST is the CRA's money, parked. Mixing the two is how a healthy-looking balance turns into two bills you can only pay one of. The full picture of income tax, CPP and GST/HST together is on self-employed taxes in Canada.

The number matters less than never having to find it all at once

Work out your real percentage, with your income, your province and CPP included, then make the set-aside automatic so the question stops coming back. Whether your number is 24% or 31%, the freelancers who feel calm in April are not the ones who computed it to the decimal. They are the ones for whom the money was already there, set down one unremarkable slice at a time.

Sources

• CRA — Tax rates and income brackets for individuals, 2026 (federal brackets; Ontario 5.05% on the first $53,891)
• CRA — Indexation adjustment for personal income tax and benefit amounts (2026 federal basic personal amount, $16,452)
• CRA — CPP contribution rates, maximums and exemptions (2026: $3,500 exemption, $74,600, 5.95% each side, $8,460.90 self-employed maximum)
• CRA — Second additional CPP (CPP2) contribution rates and maximums (2026: $85,000; $832 self-employed maximum)
• CRA — Instalment payment due dates (March 15, June 15, September 15, December 15, 2026)
• CRA — Who has to pay tax instalments ($3,000 / $1,800 Quebec)
• CRA — Prescribed interest rates, fourth calendar quarter 2026 (7% on overdue amounts, October 1–December 31, 2026)
• Government of Canada — 2026 tax deadlines for businesses and self-employed individuals (April 30, 2027 payment; June 15, 2027 filing)
• CRA — When to register for and start charging the GST/HST ($30,000 small supplier limit)
• Library of Parliament — Legislative Summary of Bill C-30 (base CPP rate 4.95% to 4.75%, 9.5% self-employed, from January 1, 2027) and LEGISinfo — Bill C-30 (Royal Assent June 18, 2026). Parliamentary sources, not CRA: the CRA had not published 2027 CPP rates or maximums as of October 7, 2026.
• TaxTips.ca — Ontario 2026 tax rates (secondary source, used for the Ontario basic personal amount, surtax and health premium in the estimate table)

This article explains CRA rules in plain language. It is an estimate, not advice: general information, not tax advice for your specific situation. Last verified October 2026: 2026 figures and dates were checked against the canada.ca pages above on October 7, 2026.