How Much CPP Does a Self-Employed Contractor Pay in BC?

A self-employed contractor in BC pays 11.9% of net business income above $3,500 into the Canada Pension Plan, because you pay both the employee half (5.95%) and the employer half (5.95%). For 2026 the base contribution tops out at $8,460.90, reached at $74,600 of earnings. On earnings between $74,600 and $85,000 you also pay CPP2 at 8%, up to $832 more. So a sole proprietor earning $85,000 or more pays up to $9,292.90 of CPP for 2026.

Nothing comes off your pay during the year. The whole amount is calculated on your personal tax return and is due by April 30, even though a self-employed return can be filed as late as June 15. That is why so many first-year contractors get a bill in April they did not plan for.

The 2026 numbers

  • Basic exemption: $3,500
  • Maximum pensionable earnings: $74,600
  • Self-employed base rate: 11.9% (5.95% employee plus 5.95% employer)
  • Maximum base contribution, self-employed: $8,460.90
  • CPP2 earnings band: $74,600 to $85,000
  • CPP2 rate, self-employed: 8%
  • Maximum CPP2, self-employed: $832
  • Most a self-employed person pays in total: $9,292.90

Figures from the CRA's CPP rates and CPP2 pages, checked November 3, 2026. The CRA usually posts next year's figures in November; the 2027 row will be added here when it does.

What it costs at different incomes

Net business income is what is left after business expenses, the line your T2125 ends on. Figures are for 2026.

  • $40,000 net business income: base CPP $4,343.50, no CPP2, total $4,343.50, about $362 a month to set aside
  • $60,000: base CPP $6,723.50, no CPP2, total $6,723.50, about $560 a month
  • $80,000: base CPP $8,460.90, CPP2 $432, total $8,892.90, about $741 a month
  • $85,000 or more: base CPP $8,460.90, CPP2 $832, total $9,292.90, about $774 a month

Worked example: a first-year framer in Kelowna. Net business income of $60,000. CPP is ($60,000 less $3,500) x 11.9% = $6,723.50. No CPP2, because earnings are under $74,600. That $6,723.50 is on top of income tax, and it is all due by April 30, even if the return itself is filed by the June 15 self-employed deadline. If that framer was an employee last year, the employer was quietly paying half of it; now it is all theirs.

How it is paid

  • With your T1 return, not through payroll. CPP on self-employment income is worked out on your personal return and is payable with the balance owing.
  • It counts toward instalments. If your net tax owing (outside Quebec) is more than $3,000 in the current year and in either of the two years before, the CRA expects quarterly instalments, and CPP payable is added into the instalment amounts. See CRA tax instalments in BC.
  • Set it aside monthly. The simplest habit is to move the "per month" figure above into a separate savings account every month, along with your income tax set-aside. Our guide to how much a BC contractor should set aside for taxes covers the rest.

You get some of it back at tax time

CPP is not all lost to tax. Half of your base contribution is claimed as a non-refundable tax credit and the other half is a deduction from income. The enhanced part of the contribution and all of CPP2 are deductions too. The deductions lower your taxable income, so the real after-tax cost is less than the cheque you write.

What changes if you incorporate

A corporation does not pay CPP on its own profit. What matters is how you pay yourself:

  • Salary from your corporation: CPP applies through payroll, and the corporation pays the employer half while you pay the employee half. Same total, but spread over the year.
  • Dividends only: dividends are not pensionable earnings, so an owner paid only dividends pays no CPP. That also means those years add nothing to your future CPP pension.

Neither is automatically better. It depends on your income, your retirement plans and how much the corporation keeps. Our page on salary or dividends in BC walks through the trade-off.

FAQ

Do self-employed people in BC pay double CPP?
Yes, in the sense that you pay both halves. An employee pays 5.95% and the employer matches it; a self-employed person pays the full 11.9% (2026), and 8% on the CPP2 band instead of 4%.

What if I have a job and a side business?
CPP your employer already took off your wages counts toward the same yearly maximums. Your return works out what is left to pay on the business income, so you never pay more than the maximum in total.

Is CPP based on my gross sales?
No. It is based on net self-employment income, after business expenses. Keeping clean records of every expense lowers both income tax and CPP.

When will the 2027 CPP numbers be out?
The CRA usually posts them in November. As of November 3, 2026 the CRA tables still ended at 2026.

Can I stop paying CPP?
Not while you are 18 to 69 and earn more than the basic exemption, and contributions end at 70. If you are 65 to 69 and already receiving your CPP retirement pension, you can elect to stop; self-employed people make that election on Schedule 8 with their return. The way owner-managers legitimately change the amount is through how they pay themselves after incorporating, covered above.

How Murtagh & Co. Can Help

If you are in your first year on your own, we can work out your CPP and income tax set-aside in one short call so April is not a surprise, and look at whether incorporating would change the math for you. Devon Murtagh, CFA, FRM, ran a trades business before starting Murtagh & Co., so the numbers come with the context of how a contracting year actually goes.

Prefer to talk it through? Book a free 30-minute call at a time that works for you, or reach out at info@murtaghco.ca. Free tools are on the Contractor Toolkit.

Sources: CRA: CPP contribution rates, maximums and exemptions; CRA: Second additional CPP (CPP2) contribution rates and maximums; CRA: Canada Pension Plan and the CPP enhancement; CRA: Who has to pay instalments.