How your take-home pay works
When you freelance, no employer deducts tax from your pay. You invoice the full amount, then you're responsible for the tax yourself at filing time. That's why setting money aside as you earn is the most important habit for a freelancer.
Your income is taxed three ways: federal income tax (14%–33%), your provincial tax, and CPP or QPP — where, as a self-employed person, you pay both the employee and employer halves because there's no employer to cover the other side.
Average vs. marginal tax rate
Your average rate is your total tax divided by your income — the real bite. Your marginal rate is what you'd pay on your next dollar earned, which matters when deciding whether to take on more work or contribute to an RRSP.
Employee vs. self-employed: what's the difference?
An employee has CPP and EI deducted automatically, and the employer pays half the CPP plus its own EI share. A self-employed person pays both halves of CPP, doesn't pay EI (unless they opt in), and has to set aside and remit their own tax. Use the toggle at the top to switch between the two.
Do freelancers need to charge GST/HST?
Once freelance revenue passes $30,000 in any 12-month period, you generally must register for and charge GST/HST. It's collected on top of your fees and remitted separately — not part of this take-home estimate.