Updated on 22 September 2026

A self-employed individual in Canada generally earns income from operating their own unincorporated business or professional activity rather than receiving employment income as an employee. This business or professional income is reported as part of the individual’s income for tax purposes.

As a self-employed individual in Canada, there are a number of tax forms and documents you may need to file with the Canada Revenue Agency (CRA) each year. Navigating which self-employed tax forms apply to you can be difficult, especially in your first year of operation.

Filing your tax return as a self-employed individual does not have to be stressful, especially if you have kept detailed financial records for the year. There are a few key differences between filing as a self-employed individual and filing as an employee.

Consulting an accountant for your self-employed tax return can help you understand the applicable deadlines and file the required tax forms correctly.

What Is Your Self-Employed Business?

First, What Kind of Business Qualifies as a Self-Employed Business?

Most self-employed individuals operate their businesses through one of the following structures:

1. A sole proprietorship;
2. A partnership.

In a sole proprietorship, the owner generally reports the business income and expenses on their individual income tax return. A partnership carries on business through two or more partners, and each partner generally reports their share of the partnership’s income or loss on their own income tax return. The allocation of income or loss among partners generally depends on the terms of the partnership agreement.

Self-Employed Tax Return Forms

There are a number of relevant tax forms for self-employed individuals. You will generally need to file a personal tax return and report your self-employment income, along with any other forms or returns that apply to your business activities and circumstances.

• Form T2125, Statement of Business or Professional Activities: This form is used to report business or professional income and expenses. It helps calculate the gross and net income or loss from your business or professional activities, which is then reported as part of your individual income tax return.
• Form T4A, Statement of Pension, Retirement, Annuity, and Other Income: Self-employed individuals may receive a T4A slip for certain types of income. For example, fees for services may be reported in box 048 of a T4A slip and must be included in the applicable self-employment income on your tax return. However, self-employed individuals are responsible for keeping complete records and reporting all business income, whether or not they receive a T4A slip.
• Form T5013, Statement of Partnership Income: If you operate your business through a partnership, the partnership may be required to file a Partnership Information Return if it meets the CRA's filing requirements. When a T5013 return is required, partners generally receive information showing their share of the partnership's income or loss, which they use when completing their own income tax returns.
• T1 Income Tax and Benefit Return: Self-employed individuals report their income for individual income tax purposes on the T1 Income Tax and Benefit Return. Information calculated on applicable self-employment forms, such as Form T2125, is used to report gross and net self-employment income or loss on the appropriate lines of the return.
• GST/HST Return: Self-employed individuals and partnerships may need to register for GST/HST when they no longer qualify as small suppliers. For most businesses, the small supplier threshold is generally $30,000, subject to CRA rules on how the threshold is calculated and when it is exceeded. Once registered, businesses generally need to charge and collect GST/HST on applicable taxable supplies and file GST/HST returns according to their assigned reporting period.

Navigating Employed and Self-Employed Tax Returns

What do you do if you are an employee of another business while also operating your own sole proprietorship or participating in a partnership?

In this situation, your employment and self-employment income are both reported as part of your individual income tax return. You will generally receive a T4 slip from your employer for your employment income, while your self-employment income is reported using the applicable self-employment forms, such as Form T2125.

Having both employment and self-employment income can affect your overall tax situation. Eligible business expenses can generally be deducted when calculating net self-employment income, while employment income is reported separately. Working with a professional tax accountant can help ensure that the different sources of income are reported correctly and that eligible business expenses and deductions are properly claimed.

Deadlines for Self-Employed Tax Returns

For the 2026 tax-filing season, self-employed individuals generally have until June 15, 2026, to file their 2025 Income Tax and Benefit Return. The same filing deadline generally applies to the spouse or common-law partner of a self-employed individual. However, any balance owing for 2025 must be paid by April 30, 2026, to avoid interest on unpaid amounts.

Self-employed individuals may also be required to make income tax instalment payments. For 2026, you may have to pay by instalments if your net tax owing is more than $3,000 ($1,800 if you live in Quebec) for 2026 and in either 2025 or 2024. The standard 2026 instalment due dates are March 15, June 15, September 15, and December 15.

Self-Employed Tax Return Guide

How can you do a self-employed tax return? Get the necessary details for filing your taxes from Accountor CPA.

Self-Employed Tax Rates and Deductions (2026)

Self-employment income is included in an individual's taxable income and is generally subject to the applicable federal and provincial or territorial income tax rates. The 2026 federal income tax rates for individuals are:

• 14% on taxable income up to $58,523, plus;
• 20.5% on taxable income over $58,523 up to $117,045, plus;
• 26% on taxable income over $117,045 up to $181,440, plus;
• 29% on taxable income over $181,440 up to $258,482, plus;
• 33% on taxable income over $258,482.

Provincial or territorial income tax rates also apply in addition to federal income tax rates. The applicable rates depend on the individual's province or territory of residence.

In addition to income tax, self-employed individuals may be required to contribute to the Canada Pension Plan (CPP). Unlike employees, who generally share CPP contributions with their employers, self-employed individuals are responsible for both the employee and employer portions of their CPP contributions.

For 2026, the CPP contribution rate for self-employed individuals is 11.9% on applicable pensionable earnings above the $3,500 basic exemption and up to the Year's Maximum Pensionable Earnings (YMPE) of $74,600. The maximum regular CPP contribution for a self-employed individual in 2026 is $8,460.90.

Self-employed individuals with pensionable earnings above the YMPE may also be required to make second additional CPP (CPP2) contributions. In 2026, pensionable earnings between $74,600 and the Year's Additional Maximum Pensionable Earnings (YAMPE) of $85,000 are subject to CPP2 contributions. The self-employed CPP2 rate is 8%, with a maximum contribution of $832 for 2026.

Self-employed individuals can also choose to participate in the Employment Insurance (EI) program for self-employed people to access certain special benefits. These may include maternity, parental, sickness, compassionate care, and family caregiver benefits. Participation is voluntary and requires entering into an agreement with the Canada Employment Insurance Commission and meeting the applicable eligibility requirements.

Declaring Expenses for Self-Employed

As a freelancer, contractor, or other self-employed individual, you may be able to deduct eligible expenses you incur to earn business income. Claiming eligible business expenses reduces your net business income, which is used in calculating your taxable income. Keeping accurate records of your income and expenses can also provide a clearer picture of your business's financial performance.

Some common business expenses that self-employed individuals may be able to claim include:

1. Salaries, wages, and benefits;
2. Inventory and certain business supplies;
3. Travel expenses;
4. Legal and accounting fees;
5. Business-related cellphone and telephone expenses;
6. Rent and leasing costs;
7. Maintenance and repairs;
8. Interest and bank charges;
9. Office expenses;
10. Advertising;
11. Eligible business-use-of-home expenses, which may include a reasonable business portion of expenses such as utilities, property taxes, mortgage interest, rent, and maintenance;
12. Eligible motor vehicle expenses, such as fuel and oil, insurance, maintenance and repairs, licence and registration fees, leasing costs, and capital cost allowance (CCA).

Not every business expense is fully deductible. If an expense has both business and personal use, generally only the portion related to earning business income can be claimed. Additional rules and limitations may also apply to specific expenses.

For example, business-use-of-home expenses can generally be claimed only when the workspace meets the CRA's eligibility requirements. Motor vehicle expenses must also be allocated between business and personal use where applicable, and appropriate records of business and total kilometres should be maintained.

For more information about eligible business expenses, visit the Canada Revenue Agency. A tax accountant can also help determine which expenses are eligible and how much can appropriately be claimed.

Submit Self-Employed Tax Return Online

Self-employed individuals can generally file their individual income tax returns electronically using NETFILE-certified tax preparation software. If an authorized tax preparer files the return electronically on your behalf, they generally use the CRA's EFILE service.

CRA My Account can be used to access personal tax information and other CRA services, but registering for My Account is not the same as filing an income tax return. Some certified tax software can also use CRA services such as Auto-fill my return to import certain tax information available from the CRA.

Electronic filing can generally result in faster processing than filing a paper return. If you are entitled to a refund, registering for direct deposit can also allow the CRA to deposit the refund directly into your bank account rather than issuing a cheque.

What Does a Self-Employed Tax Return Cost?

The CRA does not charge a fee to file an individual income tax return, including a return that reports self-employment income. However, you may have to pay for tax preparation software or professional tax preparation services, depending on how you choose to file your return.

If you choose to work with a tax accountant to prepare and file your return, the cost can vary depending on the complexity of your tax situation, the number of business activities, the quality and volume of your financial records, applicable deductions, GST/HST requirements, and other relevant factors.

Errors or omissions on a self-employed tax return can result in reassessments, additional tax owing, interest, or penalties. In some circumstances, they may also lead to additional CRA review or an audit. Working with a tax accountant can help you meet applicable filing deadlines, accurately report your income and expenses, and reduce the risk of filing errors and related penalties.

Am I Eligible for a Self-Employed Tax Refund?

A self-employed individual may be eligible for a tax refund depending on their overall tax situation, including their income, eligible deductions and credits, tax instalments, and any amounts already withheld or paid during the year. Because income tax is generally not withheld at source from self-employment income, self-employed individuals may have a balance owing when they file their tax return.

It is important for self-employed individuals to plan for their tax obligations and set aside sufficient funds throughout the year. The appropriate amount will depend on factors such as net business income, other sources of income, applicable federal and provincial or territorial tax rates, CPP and CPP2 contributions, deductions, credits, and income tax instalments. If you are registered for GST/HST, amounts collected as GST/HST should also be properly tracked and managed separately from your income tax obligations.

Working with a tax accountant who provides tax planning services can help you estimate your tax obligations, identify eligible deductions and credits, plan for required payments, and take advantage of appropriate tax-planning opportunities.

Do You Need an Accountant for Self-Employed Tax Returns?

You can prepare and file your own self-employed tax return if you have the necessary knowledge and records to do so accurately. However, professional advice can be particularly helpful if you have recently started a business, your business activities have changed, or you have new tax obligations, such as becoming required to register for GST/HST.

A tax accountant can help you meet applicable deadlines, identify and complete the required tax forms accurately, and determine which deductions and credits you may be eligible to claim. They can also provide short- and long-term tax planning support to help you understand your tax obligations and make more informed business decisions.

Accountor CPA works with self-employed individuals across Canada to prepare and file their income tax returns. Learn how we can help you manage your tax obligations, identify eligible deductions and credits, and plan for your business's financial future.

SR&ED Tax Incentives for Self-Employed Individuals

Self-employed individuals who conduct eligible scientific research and experimental development (SR&ED) work in Canada may be able to claim SR&ED tax incentives. These incentives can include a deduction against income and an investment tax credit (ITC) based on qualified SR&ED expenditures.

For individuals and unincorporated businesses, the basic federal SR&ED ITC rate is 15% of qualified expenditures. Individuals may also be eligible for a refund of 40% of the ITC earned at the 15% rate, after applying the ITC against any income tax owing, subject to the applicable rules and their individual tax circumstances.

For more information about eligible work, expenditures, and claiming the incentive, visit the Government of Canada SR&ED page.

Conclusion

Filing a self-employed tax return in Canada involves more than simply reporting business income. Self-employed individuals need to understand which tax forms apply to their activities, keep accurate records of income and expenses, meet applicable filing and payment deadlines, and account for obligations such as income tax, CPP contributions, and GST/HST where applicable.

Understanding these requirements and planning for taxes throughout the year can make the filing process easier and reduce the risk of errors, interest, and penalties. Accountor CPA can help self-employed individuals across Canada prepare their tax returns, identify eligible deductions and credits, and manage their tax obligations.

Frequently Asked Questions (FAQs)

What Forms Do I Need to File as a Self-Employed Individual in Canada?

Self-employed individuals generally report their income on a T1 Income Tax and Benefit Return and use Form T2125, Statement of Business or Professional Activities, to report applicable business or professional income and expenses. Additional forms or returns may be required depending on your business structure and activities. For example, you may need to register for GST/HST and file GST/HST returns if you no longer qualify as a small supplier under CRA rules.

When Are the Tax Deadlines for Self-Employed Individuals?

Self-employed individuals generally have until June 15 of the following year to file their income tax return. However, any balance owing is generally due by April 30 of the following year. For example, for the 2026 tax year, the filing deadline for self-employed individuals is June 15, 2027, while any balance owing is generally due by April 30, 2027.

Can I Deduct Home Office Expenses on My Self-Employed Tax Return?

You may be able to deduct eligible business-use-of-home expenses if your workspace meets the CRA's requirements. Eligible expenses may include a reasonable business portion of costs such as utilities, maintenance, property taxes, rent, or mortgage interest, depending on your circumstances. The amount you can claim is subject to CRA rules and limitations.

How Do I Report My Income If I Have Both Employment and Self-Employment Income?

Employment income is generally reported using information from your T4 slip. Business or professional income and expenses are generally reported using Form T2125, with the applicable amounts included in your T1 Income Tax and Benefit Return.

What Expenses Can I Deduct as a Self-Employed Individual?

You may be able to deduct reasonable business expenses incurred to earn business income. These can include eligible salaries and wages, inventory costs, travel expenses, legal and accounting fees, business-related telephone expenses, rent, office expenses, advertising, motor vehicle expenses, and business-use-of-home expenses. Specific CRA rules and limitations apply, and personal expenses are generally not deductible.

Do I Need to Make CPP Contributions as a Self-Employed Person?

Self-employed individuals generally pay both the employee and employer portions of CPP on applicable pensionable earnings. For 2026, the regular self-employed CPP contribution rate is 11.9% on applicable pensionable earnings above the $3,500 basic exemption and up to the YMPE of $74,600, with a maximum regular CPP contribution of $8,460.90. Self-employed individuals with pensionable earnings above the YMPE may also have to make CPP2 contributions at a rate of 8% on applicable earnings between the 2026 YMPE of $74,600 and the YAMPE of $85,000, up to a maximum CPP2 contribution of $832.

Is It Necessary to Hire an Accountant for My Self-Employed Tax Return?

No. Self-employed individuals can prepare and file their own tax returns. However, working with an accountant can help you accurately report income and expenses, identify eligible deductions and credits, meet applicable tax deadlines, and reduce the risk of filing errors.