How much should you set aside for taxes when you're self-employed in Ontario?
How much Ontario delivery drivers, makers and other self-employed people should set aside for income tax, CPP and HST, and how to avoid April surprises.
Published
Employees have tax taken off every paycheque. When you deliver for an app, sell on Etsy or invoice clients yourself, nobody does that for you, so it's on you to hold back enough. The most common money mistake for new self-employed people is spending every payout and then facing a tax bill in April.
The short answer: 25–30% of profit, plus all the HST
For most full-time self-employed people in Ontario with moderate profits, setting aside 25–30% of profit covers federal and Ontario income tax plus CPP. If you're registered for HST, set aside 100% of the HST you collect on top of that. It was never yours.
Note the word profit: income minus deductible business expenses. Tracking costs like gas, materials and platform fees lowers the amount you need to hold back.
Treat these as starting points, not calculations:
| Annual self-employment profit | Rough set-aside (income tax + CPP) |
|---|---|
| Under $30,000 | 15–20% |
| $30,000–$60,000 | 20–25% |
| $60,000–$100,000 | 25–30% |
| Over $100,000 | 30–35%+ |
Your real number depends on other income, RRSP contributions, credits and deductions. An accountant can give you a precise figure; the table keeps you from being badly short.
What the money is for
1. Income tax
Self-employment profit is taxed at the same rates as employment income. For 2026 the lowest federal rate is 14%, rising to 33% at the top, and Ontario's rates run from 5.05% to 13.16%. Because the brackets stack, your average rate is well below your top rate.
2. CPP: both halves
Employees and employers split CPP contributions. When you're self-employed you pay both halves. For 2026:
- 11.9% of net self-employment earnings between $3,500 and $74,600 (up to $8,460.90)
- 8% CPP2 on earnings between $74,600 and $85,000 (up to $832)
Part of what you pay is deductible, which takes some of the sting out. CPP is often the part that surprises people: on $50,000 of profit it's roughly $5,500 before any income tax.
3. HST, if you're registered
In Ontario you charge 13% HST once you're registered. That money belongs to the CRA. You keep it only until you file, minus the input tax credits for HST you paid on business purchases.
Delivery couriers and makers follow the $30,000 small supplier rule, but rideshare drivers must register from their first ride. See delivery driver taxes in Ontario and Etsy seller taxes in Canada.
Doing it on top of a job? Use your marginal rate
If you already earn a salary, your delivery or shop income is taxed at your marginal rate, the rate on your last dollar. That's often higher than the averages above. On the other hand, if your employer contributions have already maxed out CPP for the year, you may owe little or no CPP on the extra earnings.
Key dates
- April 30: balance owing for the year is due, even for self-employed people.
- June 15: filing deadline for self-employed individuals and their spouses or common-law partners.
- Instalments: if your net tax owing is more than $3,000 this year and in either of the two previous years, the CRA expects quarterly instalments on March 15, June 15, September 15 and December 15.
A simple system that works
- Open a high-interest savings account just for tax.
- Every time a payout or client payment lands, move your percentage plus any HST into it the same day.
- Track business costs as you go so your profit, and your set-aside, is accurate.
- Check your year-to-date profit each month and adjust the percentage if you've moved into a higher band.
Sedir shows your year-to-date business profit, HST collected and HST paid on business purchases in one Tax view, so you can check the set-aside account against real numbers rather than guesses.
General information for Ontario residents, not tax or legal advice. Check with the CRA or an accountant for your situation.
