Self-Employed Tax Guide — Ontario

1. Provincial / territorial income tax brackets — 2025

Basic Personal Amount: $12,747. Top combined federal+provincial marginal rate: 53.53%.

Surtax: 20.00% above $5,710 of basic provincial tax, rising to 36.00% above $7,307.

2. Sales tax — HST

Combined rate 13.00% (HST 13.0%). Single CRA registration covers both federal and provincial sales tax.

3. CPP / QPP & EI

Standard federal Canada Pension Plan applies (11.9% self-employed on YMPE band; CPP2 above). EI is optional for self-employed via voluntary opt-in.

4. Employer Health Tax

Employer Health Tax (EHT) applies to employers with payroll above the exemption threshold. Sole proprietors with no employees are not affected.

5. Workers' Compensation

Body: Workplace Safety and Insurance Board (WSIB). Coverage is typically mandatory for any business with employees and for construction-industry sole proprietors regardless of staff status. Most other self-employed can elect optional personal coverage.

6. Business registration

Body: ServiceOntario / Ontario Business Registry. Typical filing cost $60, renewal 5 years. Sole proprietors operating under their own legal name may be exempt from registration.

7. Minimum wage 2025

$17.60/hour (effective Oct 1, 2025).

8. Employment standards highlights

• Vacation: 2 weeks (4%), 3 weeks (6%) after 5 years
• Overtime threshold: 44 hours/week, no daily threshold
• Statutory holidays: 9

9. Provincial credits & programs

• Ontario Trillium Benefit (sales tax + energy + property credits)
• Ontario Small Business Deduction at 3.2% (combined 12.2%)
• Ontario Innovation Tax Credit (8% refundable on SR&ED-qualifying spend)
• Co-operative Education Tax Credit for hiring placements

10. Trade licensing

Skilled Trades Ontario administers compulsory and voluntary certifications. 23 trades are compulsory (electrician, plumber, sheet metal, automotive service tech, hairstylist) — working without a Certificate of Qualification is an offence under the Building Opportunities in the Skilled Trades Act (BOSTA).

11. Corporate small-business rate

Provincial SBD rate 3.20% + federal 9% = combined 12.20% on active business income up to the small business limit ($500,000 federal). General corporate combined rate 26.50%.

12. Additional notes

• Toronto MLTT: roughly doubles standard provincial LTT on residential purchases inside the old city of Toronto.
• WSIB coverage is compulsory for construction-industry sole proprietors and partners (not just employees).

Why self-employed choose Ontario

Ontario gives access to the largest consumer market in Canada plus the deepest professional service ecosystem. The trade-off is the country's most layered tax bill — federal + provincial + surtax + health premium + (in Toronto) MLTT. Best fit for service businesses targeting the GTA where revenue scale absorbs the compliance overhead.

Calculators (pre-populated with Ontario)

• Income Tax Calculator → Ontario
• Salary vs Dividend → Ontario
• CPP / EI → Ontario
• Provincial Comparison table

Other provinces & territories

• British Columbia — Tech hub tax environment — seven brackets, high top rate, strong public services.
• Alberta — Canada's most tax-competitive province — no PST, no EHT, lowest top rate of any province with retail PST regime.
• Saskatchewan — Low SBD rate, simple bracket structure, growing economy.
• Manitoba — Moderate rates, competitive for small employers, frozen BPA.
• New Brunswick — Atlantic opportunity — HST province with a growing tech sector and ACOA support.
• Nova Scotia — Highest top rates in Atlantic Canada, but NS-specific credits and a recent HST cut soften the bill.
• Québec — dual filing (T1 + TP-1), QPP, QPIP, federal abatement
• All jurisdictions →