SELF-EMPLOYMENT CALCULATOR

If your worldwide taxable sales exceed $30,000 over four consecutive calendar quarters, you lose small-supplier status and must register to collect GST/HST — and in Quebec, QST as well. The threshold applies to gross revenue, not profit, and once you cross it in a single quarter you must register immediately.

Rates depend on where your customer is: 5% GST in Alberta and the territories, 13–15% HST in Ontario and the Atlantic provinces, and in Quebec 5% GST plus 9.975% QST administered by Revenu Québec. Quebec businesses register with Revenu Québec for both taxes, not the CRA.

Registration is not all cost: once registered you can claim input tax credits (ITCs) and input tax refunds (ITRs) to recover the GST/QST you pay on business expenses — computers, software, professional fees, and a portion of home office costs. Many freelancers below the threshold register voluntarily for exactly this reason, especially when clients are businesses that can recover the tax themselves.

After registering you file GST/QST returns annually, quarterly, or monthly depending on revenue, and remit the tax you collected minus your credits. Setting aside the collected tax in a separate account is the simplest way to avoid the classic first-year cash-flow trap.

Self-employed Quebecers face a different set of payroll-style contributions than the rest of Canada. Instead of CPP you contribute to the Quebec Pension Plan (QPP), paying both the employee and employer shares on net business income above the $3,500 basic exemption — at a combined rate slightly higher than CPP, plus the additional second-tier contribution on earnings between the year's maximum pensionable earnings and the higher second ceiling.

Quebec also runs the Quebec Parental Insurance Plan (QPIP). Unlike EI — which is optional for the self-employed — QPIP is mandatory for self-employed Quebecers, funding maternity, paternity, parental, and adoption benefits at a premium rate below 1% of income. It is one of the few places in Canada where self-employed parents have guaranteed access to parental leave benefits.

Finally, Quebec residents file two returns: a federal T1 with Form T2125 for business income, and a Quebec TP-1 with the equivalent TP-80 form. Business deductions generally mirror each other on both returns, but Quebec has its own credit schedule, and the federal return applies the Quebec abatement (a 16.5% reduction of basic federal tax) to account for the province collecting its own taxes.

When estimating your tax rate, remember instalments: both the CRA and Revenu Québec require quarterly instalment payments once your balance owing exceeds their thresholds in consecutive years — missing them triggers instalment interest on both sides.