Self-employed tax in Prince Edward Island

How much of your business profit to set aside for income tax and CPP.

Business profit for 2026Self-employment income after business expenses (T2125).Province or territoryOther income (optional)Employment income with tax already taken off.RRSP contributions (optional)

Set aside for 2026$16,394About 27.3% of your profit, in Canadian dollars.

CPP (both halves)$6,724

Federal income tax$5,155

Provincial income tax$4,515

Total$16,394

Over $3,000: if you also owed that much last year or the year before, CRA will ask for quarterly instalments, due March 15, June 15, September 15 and December 15.

An estimate using 2026 CRA figures and basic personal amounts. It leaves out most other credits, so it can run a little high.

What you pay when you're self-employed

CPP, both halves. An employer would pay half for you. When you're self-employed you pay both, on profit above $3,500 up to the yearly limit, plus the second tier above that.
Federal and Prince Edward Island income tax on your profit, after your basic personal amounts. Half of your CPP is deducted from income, and the rest earns a credit.

Instalments

If you owe more than $3,000 in tax at filing ($1,800 in Quebec) this year and in either of the two years before, CRA will ask you to pay quarterly: March 15, June 15, September 15 and December 15. Otherwise, pay by April 30. Self-employed people have until June 15 to file, but the tax is still due April 30.

Lowering it

Every business expense you record lowers both the tax and the CPP. So do RRSP contributions (for income tax only) and the business share of your home and vehicle, when you keep a logbook.

Know what to set aside, every month.

SumSwift does your books from your bank statements, works out your T2125 and your tax from your actual profit, and tells you when instalments are due.

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