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Employment Income
Contract Income
🎁 Full Benefits & Compensation Comparison
⏱️ Hourly Rate Comparison — What You Actually Earn
Your effective hourly rate after tax, CPP, EI, and benefits — at different contractor rates vs. your employee salary.
💡 Contractor vs. Employee Tips for Canadians
💰 The 20–30% Premium Rule
As a general rule, contractors should charge 20–30% more than an equivalent employee salary to account for double CPP, no benefits, no job security, and business costs. This calculator gives you your exact number.
🏛️ Consider Incorporating
Once your contract income consistently exceeds ~$100,000/year, incorporating as a Canadian Controlled Private Corporation (CCPC) can significantly reduce your tax bill — the small business rate is only 9% federal.
📋 GST/HST Over $30K
If your annual contract revenue exceeds $30,000, you must register for and collect GST/HST. This is separate from income — you collect it from clients and remit it to CRA. HST collected is not your income.
🧾 Track Every Business Expense
Business expenses directly reduce your taxable income. Home office, vehicle, equipment, phone, accounting, and professional development are all deductible — potentially saving thousands in tax annually.