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Sole Proprietor Tax Calculator

2025
Business Details
$

Total business revenue before any expenses

$

Deductible business expenses (office, supplies, vehicle, etc.)

Your Results

Net Business Income

$150,000.00

Net After All Deductions

$101,848.46

Total Tax + CPP

$48,151.54

Effective Rate

32.1%

Marginal Rate

37.2%

Step-by-Step Calculation
1

Gross Revenue

$200,000.00

2

Minus: Business Expenses

-$50,000.00

=

Net Business Income

$150,000.00

3

CPP/QPP Employer Deduction (half)

-$4,646.45

=

Taxable Income

$145,353.55

GST/HST Alert: Your gross revenue of $200,000.00 exceeds the $30,000 small supplier threshold. You are required to register for and collect HST 13%.
Detailed Breakdown
Gross Revenue$200,000.00
Business Expenses-$50,000.00
Net Business Income$150,000.00
Federal Income Tax-$25,247.17
Provincial Tax (Ontario)-$13,611.46
Total Income Tax-$38,858.64
CPP/QPP (self-employed @ 11.9%)-$9,292.90
Total Deductions-$48,151.54
Net After All Deductions$101,848.46
More Information
Understanding Sole Proprietor Tax in Canada

Key information about operating as a sole proprietor in Canada

A sole proprietorship is a business structure where you operate as an individual — there is no legal separation between you and the business. "Self-employed" is a broader term that includes sole proprietors, freelancers, and independent contractors. For tax purposes in Canada, sole proprietors report business income on their personal T1 return using form T2125.
You need a CRA Business Number (BN) if you must register for GST/HST (revenue over $30,000 in four consecutive calendar quarters), have employees, or import/export goods. You can register online through CRA Business Registration Online or by filing Form RC1.
You must register for GST/HST when your worldwide taxable supplies exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. Once you exceed the threshold, you have 29 days to register. Voluntary registration can be beneficial as it allows you to claim Input Tax Credits.
Allowable expenses include advertising, insurance, professional and legal fees, office supplies, business-use portion of home office, vehicle expenses (business %), travel, meals and entertainment (50%), telephone and internet (business %), wages paid to employees, and capital cost allowance on business equipment.
Most sole proprietors must use a December 31 fiscal year-end, aligning with the calendar tax year. However, some existing businesses may have received CRA approval for an alternative fiscal year-end. New businesses starting after 2024 generally must use the calendar year.
Sole proprietors pay both the employee and employer portions of CPP — a combined rate of 11.9% on net self-employment earnings between $3,500 and $71,300 (2025). You can deduct the employer-equivalent half from your taxable income. CPP2 applies an additional 4% (both portions) on earnings between $71,300 and $81,200.
Yes, if your net tax owing exceeds $3,000 in the current year and in either of the two prior years. Instalments are due quarterly: March 15, June 15, September 15, and December 15. The CRA will send you an instalment reminder with suggested amounts.

CRA-Aligned: This calculator uses official CRA tax rates and CPP thresholds for the 2025 tax year. Results are estimates and do not account for all possible credits and deductions. Consult a tax professional for personalised advice.

Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms

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