Self-Employed? Know Your Federal Tax Deadlines in Canada

Being self-employed in Canada offers freedom and flexibility but also comes with unique tax responsibilities. Unlike salaried employees, self-employed individuals must navigate specific federal tax deadlines, payment schedules, and filing requirements to stay compliant with the Canada Revenue Agency (CRA). Missing these deadlines can lead to penalties and interest charges, which can impact your financial health. This detailed guide explains the key federal tax deadlines self-employed Canadians need to know, along with practical tips to manage their tax obligations effectively.

1. Who Is Considered Self-Employed?

You are self-employed if you operate a business or profession as a sole proprietor, independent contractor, or freelancer. This includes individuals who earn income directly from clients without an employer withholding taxes.

2. Key Federal Tax Deadlines for Self-Employed Individuals

2.1 Income Tax Filing Deadline

Your personal income tax return (T1) must be filed by June 15 following the tax year if you or your spouse/common-law partner are self-employed. This extension allows more time to prepare your return compared to the April 30 deadline for employees.

Important: Even though the filing deadline is June 15, any tax owing is still due by April 30. Failure to pay by this date will result in interest charges.

2.2 Tax Payment Deadline

All taxes owed for the year, including balances from previous years, must be paid by April 30. Paying late will incur interest charges, regardless of your filing deadline.

2.3 Instalment Payment Deadlines

If you expect to owe more than $3,000 in taxes for the current or previous year ($1,800 for Quebec residents), the CRA requires you to make quarterly instalment payments to cover your income tax and Canada Pension Plan (CPP) contributions.

Instalment due dates are:

• March 15
• June 15
• September 15
• December 15

Missing instalment payments may result in interest charges and penalties.

3. Filing Your Return: What You Need to Know

As a self-employed individual, you report your business income and expenses on Form T2125 – Statement of Business or Professional Activities. This form details your revenues, deductible expenses, and net income.

Keep thorough records of all business transactions, including receipts, invoices, and bank statements, as the CRA may request these in case of audit.

4. Additional Considerations for Self-Employed Taxpayers

4.1 Canada Pension Plan Contributions

You must contribute both the employer and employee portions of CPP on your net business income, which is calculated and reported on your tax return.

4.2 GST/HST Registration and Filing

If your gross business revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters, you must register for a GST/HST account and file regular returns.

4.3 Claiming Expenses and Deductions

Common deductible expenses include office supplies, vehicle costs, home office expenses, advertising, professional fees, and salaries paid to employees. Proper expense tracking can significantly reduce your taxable income.

5. Penalties and Interest for Missing Deadlines

The CRA imposes penalties and interest on late filings and late payments:

• Late-filing penalty: 5% of the balance owing plus 1% for each full month late, up to 12 months
• Repeated failure to file: Penalties increase to 10% plus 2% for each full month late, up to 20 months
• Interest charged daily on any unpaid balances, compounded monthly

6. Tips to Manage Your Tax Deadlines Effectively

• Mark key dates on your calendar and set reminders well in advance
• Maintain organized financial records year-round
• Consider making voluntary instalments if you expect to owe taxes
• Use CRA’s online services like My Account to monitor your tax situation
• Hire a professional accountant or tax preparer if your situation is complex