CPP/QPP for Self-Employed, Explained

You pay both shares

As an employee, CPP (or QPP in Quebec) contributions are split evenly between you and your employer. Self-employed, there's no employer to split with — you pay the full combined rate yourself, on your net self-employment income.

The rates

For 2026, the combined self-employed rates are:

• CPP (outside Quebec): 9.9% base + 2% enhanced = 11.9% combined, on pensionable earnings up to the Year's Maximum Pensionable Earnings (YMPE) of $74,600, above a $3,500 basic exemption.
• QPP (Quebec): 10.6% base + 2% enhanced = 12.6% combined, on the same $74,600 YMPE and $3,500 exemption.

Both plans also have a second tier — CPP2/QPP2 — an additional 8% on earnings between the $74,600 YMPE and an $85,000 second ceiling. This only applies once your net self-employment income exceeds $74,600.

Deduction and credit, not just an expense

Only the base-rate portion (9.9% for CPP, 10.6% for QPP) is split for tax purposes: half counts as a business-expense deduction (reducing your taxable income), and half counts as a non-refundable tax credit (reducing your federal and provincial tax owing directly, each at its own lowest-bracket rate). The enhanced-rate portion (2%) and the entire second-tier amount (CPP2/QPP2) are fully deductible, with no credit component.

This split matters because a deduction and a credit reduce your tax bill differently — a $100 deduction saves you your marginal rate times $100, while a $100 credit saves a fixed amount at the lowest federal and provincial bracket rates combined, regardless of your actual bracket.

Working out the base/enhanced/second-tier split and its deduction/credit treatment by hand, on top of your income tax, is exactly the kind of multi-step calculation a tool automates in one pass.