Plain meaning
Income earned from carrying on a business, profession, trade, or other activity on one's own account rather than as an employee.
Also called
sole proprietorship income
professional income
business income
Key points
- Self-employed taxpayers generally report gross income and deduct reasonable expenses incurred to earn that income.
- Net self-employment income is generally subject to CPP contributions, including both the employee and employer portions.
- A self-employed person may have to make tax instalments if not enough tax is withheld during the year.
- GST/HST registration may be required when taxable supplies exceed the small-supplier threshold or when other registration rules apply.
- Good books and records matter because income, expenses, and input tax credits may need to be supported if reviewed by the CRA.
Why it comes up
Self-employment income affects deductible expenses, CPP contributions, instalments, GST/HST registration, and record-keeping obligations.