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# Employee vs self-employed: which actually pays more?

Thinking of leaving the T4 job to go out on your own? The honest answer surprises people: at the same income, employment keeps more, because the self-employed pay *both* halves of CPP and get no EI. In Ontario, a **$75,000** salary nets about **$56,716** — and you'd need roughly **$78,211** self-employed just to match it. Here's the full picture, and where self-employment wins it back.

Your provinceThe T4 job: annual salaryThe employed offer, before deductions. Vacation pay is assumed baked in.

Self-employed: expected net incomeRevenue minus business expenses — your profit before tax and CPP.

Employed take-home **$56,716**Self-employed take-home **$61,110**

At $85,000 net, self-employment puts

$4,394

more in your pocket than the salary

To simply **match** the $75,000 job's take-home, you'd need about **$78,211** in net self-employment income — the gap is the second CPP half you now carry, with no EI in return.

### See exactly where every dollar goes

You have the number. The 2026 Tax-Year Pass shows the working behind it:

- Your printable **2026 Contractor Tax Report** — every calculator in one accountant-ready PDF
- Line-by-line breakdown with the CRA rule cited for each amount
- The incorporation break-even tool — should you incorporate, and what it saves
- Your numbers saved on this site through the whole filing season$5 · one time · covers the entire 2026 tax year

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### What this assumes (read before you rely on it)

- Both sides use the same sourced 2026 federal and provincial tax engine. The employee pays one CPP half (5.95%) plus EI (1.63% to $68,900); the self-employed pay both CPP halves (11.9%) and no EI.
- The T4 salary is treated as already including vacation pay; the employer's CPP/EI share is the employer's cost, not yours.
- Ignores the small Canada Employment Amount credit (employees only) and any employer benefits or pension match, which tilt further toward employment.
- Self-employed net income is after business expenses — the write-offs are what you make of them.
- A planning estimate, not tax or career advice.

## The self-employed CPP penalty, in one number

This is the number nobody tells you when you go solo. As an employee you pay half of CPP — about 5.95% — and your boss quietly matches it. The day you're self-employed you pay **both halves, 11.9%**, because you're now the employer too, per [the CRA's CPP contribution rates](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp.html). On the same income that's close to double the CPP, and it's exactly why matching a salary requires *more* self-employment income, not the same. See [the 11.9% CPP surprise](https://tradestaxcalculator.ca/cpp-self-employed/) for the full mechanics.

## Where self-employment wins it back

The comparison above is the tax math alone — and on tax math alone, the salary usually wins. Self-employment closes and beats the gap through three levers a salaried job can't offer:

- [Write-offsEvery legitimate expense lowers the net income you're taxed on — the salaried can't deduct their commute.](https://tradestaxcalculator.ca/deductions/vehicle-write-off/)
- [Your rateYou set the price. Charging correctly beats a fixed wage — work out the rate that nets a living.](https://tradestaxcalculator.ca/hourly-rate-calculator/)
- [Incorporation, laterOnce your income is high enough, incorporating defers tax a salary never can.](https://tradestaxcalculator.ca/)

## The trade, honestly

Going self-employed you give up EI, any employer pension match and benefits, paid vacation and sick days, and a predictable cheque — see [the CRA's EI premium rates and maximums](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html) for what employees pay in and get back. You gain write-offs, control of your rate, and room to incorporate. The tax math is only one column of that ledger — but it's the column people guess wrong most often, which is what this tool fixes.

## Common questions

### Do you take home more as an employee or self-employed?

At the same headline income, an employee keeps more, because they pay only one half of CPP (5.95%) while the self-employed pay both (11.9%) and get no EI in return. In Ontario for 2026, a $75,000 T4 salary nets about $56,716. To match that take-home self-employed you'd need roughly $78,211 in net income — the difference is that second CPP half. Self-employment only pulls ahead through write-offs, a higher rate, or incorporating.

### Why do the self-employed pay more CPP?

As an employee, you pay one half of CPP and your employer pays the matching half. Self-employed, you're both employer and employee, so you pay the full 11.9% yourself. On earnings up to the 2026 maximum that's roughly double the CPP an employee pays — the single biggest reason a self-employed dollar is worth less than a salaried dollar before write-offs.

### How much self-employment income equals a $75,000 salary?

About $78,211 of net self-employment income in Ontario gives the same take-home as a $75,000 T4 salary in 2026 — roughly $3,211 more, to cover the extra CPP half you now carry. Change the province and salary in the calculator for your own break-even.

### Do self-employed people pay EI?

No. Employees pay EI premiums — 1.63% on earnings up to $68,900 in 2026, a maximum of about $1,123. The self-employed don't pay EI, but they also don't get regular EI benefits — no job-loss coverage, and maternity/parental or sickness benefits only if you opt in separately.

### So is it worth going self-employed?

On the raw tax math, employment usually keeps more per dollar. Self-employment wins when you use its levers: legitimate write-offs that shrink your taxable net income, control over your rate (you can charge more than a fixed wage), and the option to incorporate and defer tax once you're earning well. The trade is real benefits and security for control and upside.

**Made the jump?** [Blue Crane](https://bluecraneworks.ca/) captures the receipts behind those write-offs and builds the invoices at your new rate — so the self-employed side of this comparison actually pays off at filing time.

Tax and CPP use the same 2026 engine as the province calculators (CRA-sourced). EI 2026 rates verified 2026-08-03: [CRA — EI premium rates and maximums (2026)](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html). A planning estimate, not tax or career advice.

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Source: https://tradestaxcalculator.ca/employee-vs-self-employed/