Self-Employed Tax Returns for Contractors, Freelancers and Sole Proprietors
When you work for yourself, no one withholds your tax, CPP or GST/HST. Bestax prepares your T2125 and personal return, claims the expenses you are entitled to, and sets you up so next year’s tax is not a surprise.
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Who Needs Self-Employed Tax Help
If you earn business or professional income outside a T4 job, you report it on Form T2125 with your personal return. That covers full-time businesses, side income and platform work alike.
- Contractors and consultants paid on invoice or on a T4A instead of a T4.
- Freelancers in design, writing, technology, coaching and other professional services.
- Rideshare, delivery and other gig workers paid through an app or platform.
- Online sellers and creators earning from marketplaces, ads or subscriptions.
- Trades and home-based businesses run as sole proprietorships.
- Employees with a side business alongside their T4 income.
Self-employed income is not only income tax. You pay both shares of CPP on your earnings, and once your sales pass the small supplier threshold you must also register for GST/HST.
Read our guide to self-employed taxes in Canada, or see our GST Registration service if your sales are approaching the threshold.
What Our Self-Employed Tax Service Covers
We prepare the full return, not just the business schedule, and keep every figure consistent with your GST/HST filings.
- Form T2125 for your business or professional income, with income reconciled to your deposits and slips.
- Deductible expenses reviewed and claimed, including the business share of home office and vehicle costs.
- Capital cost allowance on equipment, computers and vehicles, tracked by class from year to year.
- CPP contributions on self-employment earnings calculated on Schedule 8.
- Instalment planning, so next year’s tax is paid on schedule instead of in one lump.
- GST/HST registration and returns when your sales require them, filed in step with your T2125.
The CRA Rules for Self-Employed Canadians
Self-employed individuals, and their spouses or common-law partners, have until June 15 to file their return. Any balance owing is still due on April 30, and interest runs on unpaid tax from that date.
Because nothing is withheld at source, you pay income tax and both the employee and employer shares of CPP yourself, calculated on Schedule 8. In Quebec, the Quebec Pension Plan applies instead.
Report all business income on Form T2125, including cash, e-transfers and platform payouts.
Pay instalments if 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.
Register for GST/HST once your taxable sales exceed $30,000 in a single calendar quarter or over four consecutive quarters.
Keep receipts and records for at least six years: expenses you cannot support can be denied on review.
Some workers must register for GST/HST sooner. Taxi and rideshare drivers, for example, must register from their first fare, whatever their sales.
Key Dates for Self-Employed Filers
The filing date is later for the self-employed, but the payment date is not. These are the dates that matter for most sole proprietors with a calendar-year business.
| Obligation | What is due | Date | If it is missed |
|---|---|---|---|
| Personal tax return | T1 return with Form T2125 and Schedule 8 | June 15 | Late-filing penalty on any balance owing, plus interest |
| Balance owing | Income tax and CPP for the year | April 30 | Daily compound interest from May 1 |
| Instalments | Quarterly payments toward the current year’s tax | March 15, June 15, September 15 and December 15 | Instalment interest, and a penalty if it is large |
| Annual GST/HST return | Return for an individual with a December 31 year-end | June 15, with payment due April 30 | Penalties and interest on the GST/HST owing |
When a deadline falls on a weekend or public holiday, the CRA treats a return or payment as on time if it is received on the next business day.
What We Need for Your Self-Employed Return
Good records are where the tax saving is. The more clearly your income and expenses are documented, the more we can claim with confidence.
If your records are incomplete, bring what you have. We rebuild the year from bank and card statements, and set up a simpler system for next year.
- Invoices, sales reports and T4A slips, plus statements from any platforms that paid you.
- Receipts or a list of business expenses, with bank and credit card statements.
- Home office details: the area used for work and the total area of the home, with utility, rent or mortgage interest and property tax figures.
- A vehicle log of business kilometres and the year’s fuel, insurance, repair and lease or loan costs.
- Purchases of equipment, computers or vehicles during the year.
- Your GST/HST number and returns, if registered, and last year’s notice of assessment.
Our Self-Employed Tax Process
Free first call
You tell us what you do and how you are paid. We confirm what needs filing and for which years.
Gather records
We send a checklist and collect your income, expense and vehicle records securely.
Prepare the T2125
We match income to deposits, sort expenses, calculate CCA and the business share of home and vehicle costs.
Review with you
We walk you through the return, the CPP and the balance owing before anything is filed.
File and plan ahead
We file electronically, set up instalments if needed and flag when GST/HST registration is due.
Why the Self-Employed Choose Bestax
Every eligible expense
We review your costs line by line, so you claim what you are entitled to and nothing you cannot support.
GST/HST in step
Your income tax and GST/HST figures are prepared together, so they agree with each other.
No April surprises
We estimate next year’s tax and CPP and set up instalments, so the bill is spread across the year.
Records rebuilt
Missing receipts or a shoebox of paper? We work from bank statements and set up a better system.
Answers all year
Questions about a new expense, a vehicle or incorporating come to the same accountant.
Related Bestax Services
GST/HST Registration when your sales pass the small supplier threshold or your work requires it sooner.
Personal Tax Returns for the rest of your T1, from employment income to investments and credits.
Bookkeeping to keep income and expenses organized month by month instead of at tax time.
Small Business Tax when your business grows and you are weighing whether to incorporate.
What Our Clients Say
After years of DIY tax filing, I decided to work with professionals, and I’m glad I chose Bestax. Their team corrected years of minor errors and even identified deductions I had missed. The savings more than paid for the service.
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Frequently Asked Questions
Self-employed individuals have until June 15 to file their return, but any balance owing must be paid by April 30. Interest is charged on unpaid tax from May 1, even if you file on time in June.
Yes. You pay both the employee and employer shares of CPP on your self-employment earnings, calculated on Schedule 8 and paid with your income tax. In Quebec, contributions go to the Quebec Pension Plan instead.
Generally once your taxable sales exceed $30,000 in a single calendar quarter or over four consecutive quarters. Taxi and rideshare drivers must register from their first dollar of fares. Our GST registration service handles the registration and the returns that follow.
Yes, for the business share. A home office qualifies if it is your principal place of business, or is used only for the business and regularly to meet clients. Vehicle costs are claimed by the share of business kilometres, so a log for the year matters.
You must pay instalments if 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 sends reminders with suggested amounts, and we can calculate an amount that better matches your current income.
Our guide to self-employed taxes in Canada covers the basics. A free call with us then turns it into a plan for your own return.