CPP Contributions for the Self-Employed (2026): Rates, CPP2, Schedule 8 and Worked Examples

If you're self-employed in Canada, nobody deducts Canada Pension Plan contributions from your pay — you pay them yourself when you file your income tax return, and you pay both halves: the employee share and the employer share. On a good year that's one of the largest single amounts on your return. This guide is for sole proprietors, freelancers, contractors and partners outside Quebec who want to know what they'll owe for 2026, how CPP2 works, which part is a deduction and which a credit, how Schedule 8 works, when to pay, and what the numbers look like at different income levels in Canadian dollars.

Quick answer

Self-employed Canadians pay 11.9% CPP on net self-employment earnings between C$3,500 and C$74,600 (maximum C$8,460.90 in 2026), plus CPP2 at 8% on earnings from C$74,600 to C$85,000 (maximum C$832). It's worked out on Schedule 8 and paid with your return.

• Half the base contribution is a tax credit (line 31000); the rest is a deduction (line 22200)

• Balance due 30 April; return due 15 June for self-employed filers

• Have a job too? Schedule 8 counts the CPP already deducted from your T4

• Quebec residents pay QPP instead, through Revenu Québec

• Ottawa intends to cut the base rate to 9.5% from 2027

Who has to pay CPP on self-employment income

You contribute to the CPP on self-employment income if you're a resident of a province or territory other than Quebec, are between 18 and 70, and have net self-employment earnings — from a sole proprietorship, a partnership, or freelance and contract work reported on Form T2125. If you're a partner, only your share of the partnership's net profit counts.

The amount is based on net self-employment income: your business revenue minus allowable business expenses. That's an important point for planning. Every legitimate expense you claim reduces both your income tax and your CPP, because CPP is calculated on the same net figure.

Some groups contribute differently or not at all:

• Quebec residents contribute to the Quebec Pension Plan (QPP) instead. Self-employed Quebecers pay both shares of QPP through their Quebec return. The 2026 employee QPP rate is 6.3%, so the self-employed rate is double that on the base and first additional layers.
• Incorporated owners don't pay CPP on dividends. CPP applies only if your corporation pays you a salary, in which case the corporation deducts the employee share through payroll and pays the employer share — see our payroll deductions guide.
• People 65 to 70 who receive a CPP retirement pension can elect to stop contributing with Form CPT20.
• People under 18 or over 70 don't contribute; contributions are prorated in the year you turn 18 or 70, or start receiving a CPP disability pension.

If your net self-employment income is C$3,500 or less and you have no employment income, you owe no CPP at all — the basic exemption covers it.

The 2026 self-employed CPP rates

The CPP now has three layers. The original "base" CPP and the first additional layer, introduced gradually from 2019, apply to earnings up to the Year's Maximum Pensionable Earnings (YMPE). The second additional layer — known as CPP2 — started in 2024 and applies to earnings between the YMPE and a higher ceiling, the Year's Additional Maximum Pensionable Earnings (YAMPE). An employee pays half of each layer and their employer pays the other half. A self-employed person pays both.

Self-employed CPP in 2026

Layer	Earnings it applies to	Self-employed rate	Maximum
Base CPP	C$3,500 to C$74,600	9.9%	C$7,038.90
First additional	C$3,500 to C$74,600	2%	C$1,422
Total CPP (CPP1)	C$3,500 to C$74,600	11.9%	C$8,460.90
CPP2 (second additional)	C$74,600 to C$85,000	8%	C$832

Base CPP

Earnings it applies to

C$3,500 to C$74,600

Self-employed rate

9.9%

Maximum

C$7,038.90

First additional

Earnings it applies to

C$3,500 to C$74,600

Self-employed rate

2%

Maximum

C$1,422

Total CPP (CPP1)

Earnings it applies to

C$3,500 to C$74,600

Self-employed rate

11.9%

Maximum

C$8,460.90

CPP2 (second additional)

Earnings it applies to

C$74,600 to C$85,000

Self-employed rate

8%

Maximum

C$832

Put together, the most a self-employed person can owe for 2026 is C$8,460.90 plus C$832, or C$9,292.90. That maximum is reached once net self-employment earnings hit C$85,000. Above that, no further CPP is owed.

For comparison, an employee pays 5.95% up to a maximum of C$4,230.45, plus 4% CPP2 up to C$416, with the employer matching both. The self-employed figures are exactly double.

The ceilings rise most years. In 2025 the YMPE was C$71,300 and the YAMPE C$81,200, with a self-employed maximum of C$8,068.20 plus C$792 for CPP2. For 2026 the YMPE rose to C$74,600 and the YAMPE to C$85,000, while the rates stayed the same. The basic exemption has been frozen at C$3,500 for years.

How to calculate your CPP contributions

Schedule 8 (form 5000-S8) does the calculation, and tax software fills it in automatically. It helps to understand the steps, though, because they explain why the deduction and credit split works the way it does.

Self-employed CPP, step by step (no employment income)

1. 1

   Find your net self-employment income

   Take the net income from Form T2125 (or your share of a partnership's net income).

2. 2

   Work out pensionable earnings up to the YMPE

   Use the lower of your net self-employment income and C$74,600, then subtract the C$3,500 basic exemption.

3. 3

   Calculate base and first additional contributions

   Multiply that amount by 9.9% (base) and by 2% (first additional).

4. 4

   Calculate CPP2 if you earned more than the YMPE

   Take earnings above C$74,600, up to C$85,000, and multiply by 8%.

5. 5

   Split into deduction and credit

   Half of the base amount goes to line 31000 as a credit. The other half of the base, plus all first additional and CPP2 amounts, goes to line 22200 as a deduction. The total goes on line 42100.

Worked examples (2026 rates)

A freelancer earning C$50,000. Maya, a graphic designer in Halifax, has net self-employment income of C$50,000 and no job. Her pensionable earnings are C$50,000 − C$3,500 = C$46,500.

• Base: C$46,500 × 9.9% = C$4,603.50
• First additional: C$46,500 × 2% = C$930.00
• CPP2: none, because she earned less than the YMPE
• Total CPP payable (line 42100): C$5,533.50 — the same as 11.9% × C$46,500

Her deduction on line 22200 is half the base (C$2,301.75) plus the first additional (C$930), or C$3,231.75. Her credit amount on line 31000 is the other half of the base, C$2,301.75.

A contractor earning C$100,000. Daniel, an IT consultant in Calgary, nets C$100,000. He hits both ceilings.

• Base: (C$74,600 − C$3,500) × 9.9% = C$7,038.90
• First additional: C$71,100 × 2% = C$1,422.00
• CPP2: (C$85,000 − C$74,600) × 8% = C$10,400 × 8% = C$832.00
• Total CPP payable: C$9,292.90

His line 22200 deduction is C$3,519.45 + C$1,422 + C$832 = C$5,773.45. His line 31000 credit amount is C$3,519.45. Earning more than C$85,000 wouldn't increase his CPP.

A side business. Priya earns C$3,000 net from weekend photography and has no other earnings. That's under the C$3,500 basic exemption, so she owes no CPP — but she still reports the income on her return.

Deduction or credit: how the tax relief works

The split between line 22200 and line 31000 mirrors how an employee and employer are taxed. An employer deducts its share of CPP as a business expense; an employee gets a non-refundable credit for their share of the base CPP and a deduction for their share of the enhanced layers. As a self-employed person you're both, so:

• Line 22200 (deduction): the "employer" half of the base contribution, plus all of the first additional and CPP2 contributions. A deduction reduces taxable income, so it's worth your marginal tax rate — more for higher earners.
• Line 31000 (credit): the "employee" half of the base contribution. A non-refundable credit reduces tax at the lowest federal rate, and you claim the matching provincial or territorial credit on Form 428.

That's why the enhanced layers are more tax-efficient than the base: they're fully deductible. In Daniel's case, C$5,773.45 of his C$9,292.90 is deducted from income, and only C$3,519.45 becomes a credit.

Self-employed CPP at a glance (2026)

11.9%

CPP rate up to the YMPE

9.9% base + 2% first additional

C$8,460.90

Maximum CPP (CPP1)

C$832

Maximum CPP2

8% from YMPE to YAMPE

C$9,292.90

Combined maximum

If you also have a job

Many self-employed people also earn a salary. In that case your employer has already deducted CPP from your pay, and Schedule 8 (Part 5) takes it into account. You never pay more than the maximum on your combined earnings.

The schedule uses your T4 amounts — boxes 16 and 16A for CPP and CPP2 contributions and box 26 for pensionable earnings — to work out how much of the YMPE and YAMPE is left. It then charges the full self-employed rate on the self-employment earnings that fill the remaining room.

Worked example. Leah earns a salary of C$40,000 as a part-time college instructor and nets C$30,000 from a consulting practice. Her employer deducted CPP on her salary, and her basic exemption was used against that salary. Her combined earnings of C$70,000 are under the YMPE, so all C$30,000 of self-employment earnings is pensionable at 11.9%: C$3,570 of CPP on her self-employment income, on top of what was withheld at work. If her salary alone had exceeded the YMPE, she would owe only CPP2 on the self-employment earnings, up to the YAMPE.

Two rules trip people up here. You can't use a business loss to reduce CPP you've already paid on employment income — a loss just means no self-employed CPP for that year. And if you have income from both CPP and QPP provinces, or moved to or from Quebec, you use Form RC381 instead of Schedule 8.

When and how you pay

Self-employed CPP isn't paid separately — it's part of the balance owing on your T1 return.

• Filing deadline: self-employed individuals and their spouses or common-law partners have until 15 June to file.
• Payment deadline: any balance, including CPP, is due by 30 April. Interest runs on unpaid amounts from 1 May, even though the return isn't due until June.
• Instalments: if your net tax owing is more than C$3,000 in the current year and either of the two previous years, the CRA expects quarterly instalments on 15 March, 15 June, 15 September and 15 December. CPP payable isn't counted when testing that C$3,000 threshold — but once you're required to pay instalments, CPP must be added to the instalment amount.

In practice, many freelancers set aside 11.9% of each invoice's profit for CPP, plus their estimated income tax, in a separate account. On C$4,000 of monthly net income, that's about C$476 a month for CPP alone until the YMPE is reached. Our federal tax calculator can help estimate the income tax side.

Partners, part-year contributors and older owners

A few situations change the calculation, and they're where most reassessments of self-employed CPP come from.

Partnerships. If you're a partner, you report only your share of the partnership's net income on Schedule 8, and CPP is calculated on that share. A limited or non-active partner's income is treated differently, so check the partnership's T5013 slip and the line 22200 guidance before assuming the whole allocation is pensionable.

More than one business. Add the net income from all your sole-proprietorship activities together. A profit from one business and a loss from another net out before CPP is calculated, because CPP is based on total net self-employment earnings. What you can't do is use that net loss to claw back CPP your employer already deducted from a salary.

Part-year contributors. The maximums and the basic exemption are prorated by month in the year you turn 18, the year you turn 70, the year you start or stop receiving a CPP disability pension, and the year of death. Tax software handles this if your date of birth and pension details are entered correctly; on paper, Schedule 8 has the monthly proration lines.

Owners aged 65 to 70. If you're receiving your CPP retirement pension and still working for yourself, you keep contributing unless you elect to stop with Form CPT20. Contributions you make after the pension starts earn a post-retirement benefit that increases your pension the following year, so stopping isn't automatically the better choice. You can attach CPT20 to a paper return or send it separately by the filing deadline.

Fixing mistakes. If you overpaid — for example because two employers each deducted CPP, or because a T4 was wrong — Schedule 8 works out the overpayment and it's refunded through your return. The CRA can generally refund an overpayment only if you ask within four years after the end of the year it was made, so review older returns sooner rather than later.

How self-employed CPP has changed

2019

CPP enhancement begins — first additional contributions phased in

2024

CPP2 starts on earnings between the YMPE and the YAMPE

2026

YMPE C$74,600, YAMPE C$85,000; rates unchanged at 11.9% and 8%

1 Jan 2027

Announced: base rate cut to 9.5% combined (additional layers unchanged)

What your contributions buy

CPP contributions aren't a tax that disappears — they build your own CPP retirement pension, and they count toward disability and survivor benefits. The enhanced layers (first additional and CPP2) were added to raise the pension's replacement rate over time, so contributions made since 2019 increase the eventual pension above what the base CPP alone would pay.

That doesn't mean higher CPP is always the best choice for an incorporated owner. Paying yourself salary creates CPP contributions and RRSP room; paying dividends avoids CPP but builds no pension. The right mix depends on income, age and retirement plans, and is worth discussing with an accountant. Our guide to the small business tax rate explains the corporate side.

Changes for 2027

The CRA's July 2026 payroll formulas guide notes that the federal government has announced its intention to reduce the base CPP contribution rate from 9.9% to 9.5% (4.95% to 4.75% each for employees and employers) from 1 January 2027. The first and second additional rates aren't affected. For a self-employed person earning at or above the YMPE, that would mean a total CPP rate of 11.5% instead of 11.9% on earnings up to the YMPE. The 2027 YMPE and YAMPE will be published by the CRA, usually in November.

Because this is an announced intention, check the CRA's 2027 rates page before using it in your planning.

Self-employed CPP checklist

0/8

• Track net self-employment income (revenue minus allowable expenses) through the year
• Set aside about 11.9% of profit for CPP until net income reaches the YMPE, and 8% above it up to the YAMPE
• If you also have a job, keep your T4 — boxes 16, 16A and 26 feed Schedule 8
• Complete Schedule 8 (or RC381 if you also have QPP income)
• Claim line 22200 as a deduction and line 31000 as a credit
• Pay the balance by 30 April, even though you can file by 15 June
• If you pay instalments, include CPP in each instalment
• At 65–70 and receiving CPP, decide whether to file Form CPT20

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Common mistakes

Budgeting for 5.95%. That's the employee rate. Self-employed people pay 11.9% — and 8% CPP2 above the YMPE. Underestimating CPP is the most common reason first-year freelancers face a large April bill.

Waiting until 15 June to pay. The filing deadline is extended for the self-employed; the payment deadline isn't.

Ignoring CPP in instalments. It doesn't count for the threshold, but it must be included in the payments.

Trying to offset a business loss against payroll CPP. The CRA doesn't allow it.

Over-contributing with two income sources. If you had more than one employer, or a job and a business, Schedule 8 calculates any overpayment for you; the refund comes through your return.

Official links

• CRA — CPP rates, maximums and exemptionsYMPE, exemption, self-employed maximum
• CRA — CPP2 rates and maximumsYAMPE and CPP2 maximums
• CRA — Schedule 8 (5000-S8)The calculation form
• CRA — line 22200 deductionDeduction rules, CPT20, RC381
• CRA — who pays instalmentsThreshold and how CPP is added

What to do next

Estimate this year's net self-employment income, apply 11.9% up to the YMPE and 8% above it, and move that amount into a separate account now rather than in April. If you're thinking about incorporating to manage CPP and tax, read our guide to incorporating in Canada and the small business tax rate, and keep your CRA My Business Account up to date if you've registered a business number.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much CPP do self-employed people pay in 2026?

Self-employed Canadians outside Quebec pay both the employee and employer shares: 11.9% on net self-employment earnings between the C$3,500 basic exemption and the C$74,600 YMPE, up to C$8,460.90. Earnings from C$74,600 to C$85,000 attract CPP2 at 8%, up to C$832. The combined maximum is C$9,292.90.

Is CPP for self-employed tax deductible?

Partly deductible, partly a credit. On Schedule 8, half of the base contribution (the employer share) plus all first and second additional contributions are deducted on line 22200. The other half of the base contribution (the employee share) goes on line 31000 as a non-refundable tax credit, with a matching provincial or territorial credit.

When do self-employed people pay CPP?

CPP on self-employment income is calculated on Schedule 8 and paid with the income tax return. The balance is due by 30 April, even though self-employed filers have until 15 June to file. If you pay tax by instalments, CPP payable must be added to your instalment amount, although it doesn't count toward the C$3,000 net-tax-owing test.

Do I pay CPP if I'm self-employed and also have a job?

Yes, but the maximum still applies across both. Schedule 8 starts with the CPP your employer already deducted from your T4 pay and charges the self-employed rate only on the remaining pensionable earnings up to the YMPE and YAMPE. You can't use a business loss to reduce CPP already paid on employment income.

Can I stop paying CPP when self-employed?

Contributions are required from age 18 until 70. If you're 65 to 70 and receiving a CPP retirement pension, you can elect to stop contributing by filing Form CPT20 — with your paper return, or separately by the filing deadline. Contributions are prorated in the year you turn 18 or 70, or receive a CPP disability pension.

Is the CPP rate going down in 2027?

The federal government has announced its intention to cut the base CPP rate from 9.9% to 9.5% combined from 1 January 2027, so a self-employed person's base rate would fall to 9.5%. The first and second additional rates aren't affected. Check the CRA's 2027 rates before relying on it, since it's an announced intention.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 13 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.CPP contribution rates, maximums and exemptions — Canada Revenue Agency · accessed 13 October 2026
2. 2.Second additional CPP contribution rates and maximums — Canada Revenue Agency · accessed 13 October 2026
3. 3.Schedule 8 (5000-S8): CPP contributions and overpayment, 2025 — Canada Revenue Agency · accessed 13 October 2026
4. 4.Line 22200 – Deduction for CPP or QPP contributions on self-employment income and other earnings — Canada Revenue Agency · accessed 13 October 2026
5. 5.Line 31000 – Base CPP or QPP contributions on self-employment income and other earnings — Canada Revenue Agency · accessed 13 October 2026
6. 6.T4127 Payroll Deductions Formulas, 123rd edition (July 2026) — Canada Revenue Agency · accessed 13 October 2026
7. 7.2026 tax deadlines for Canadian businesses and self-employed individuals — Government of Canada · accessed 13 October 2026
8. 8.Who has to pay — required tax instalments for individuals — Canada Revenue Agency · accessed 13 October 2026