Self Employment
Being self-employed means you earn income by working for yourself instead of being an employee. You might run your own business, do freelance work, offer services like photography or consulting, or work as a tradesperson or gig worker.
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If no one gives you a T4 at the end of the year and you’re responsible for tracking your own income and expenses, you're likely self-employed.
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You’re in charge of everything — finding work, getting paid, paying taxes, and reporting it all to the government. That’s a big shift, but it also gives you more control over your money and time.
How Do You Know if You’re Self-Employed
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You are self-employed if:
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You invoice clients or customers directly
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You decide your own hours and rates
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You pay for your own tools, supplies, or workspace
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You are not on an employer’s payroll
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Even if you work through apps or platforms like Uber, DoorDash, or freelance websites, the CRA usually sees that as self-employment.
What You Need to Report
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When tax time comes, you’ll need to report:
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All the income you earned through your business or freelance work
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The expenses you had to earn that income (such as supplies, equipment, advertising, phone bills, or a portion of your vehicle or home office)
The difference between your income and your expenses is your net income, and that’s what you’ll pay tax on.
Where to Report It
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To report self-employment income, you do not get a T4 slip. Instead, you fill out a form called the T2125 – Statement of Business or Professional Activities. This is where you list your income and expenses.
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You can get this form in a few ways:
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Download it from the CRA website (search “T2125 CRA”)
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Use tax software like TurboTax, Wealthsimple Tax, or UFile — they’ll guide you through it
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Ask an accountant or tax preparer to help you fill it out
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Once complete, the T2125 gets filed with your regular tax return.
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Taxes You Need to Pay
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When you’re self-employed, no one is taking taxes off your income for you. That means you are responsible for:
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Income tax based on your net income
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Canada Pension Plan (CPP) contributions — these can be a surprise if you’re not prepared
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Possibly GST or HST if your total revenue goes over $30,000 per year (in which case you’ll need to register with the CRA)
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Because taxes are not automatically deducted, many self-employed people set aside 25 to 30 percent of each payment they receive to cover taxes later.
Bottom Line
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Being self-employed gives you flexibility and freedom, but also more responsibility. You are both the worker and the boss. Learning to track your income, keep receipts, and stay organized makes tax time easier and helps you avoid surprises.
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Start small. Keep records. Ask for help when you need it. The CRA has tools to guide you, and there are many tax professionals who work with people just like you every day.
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