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You have a day job, taxes come off your paycheque, and then you freelance, drive, sell or consult on the side. This calculator answers the question generic tools get wrong: what does the side income actually add to your tax return — at your real marginal brackets, with CPP on your side income coordinated with your paycheque CPP the way the CRA's Schedule 8 does it. Example for 2026: a $60,000 day job plus $20,000 of net side income in Ontario adds about $7,682.78 to the return — roughly $384 per $1,000 of side income (worked examples below).
✓ Every figure on this page is computed from CRA-published rules — figures last re-verified · how we verify
Add your T4 box-22 withholding for your exact balance owing → Do quarterly instalments apply to me?
The full calculator also shows your monthly set-aside, after-tax income, and a Québec self-employment-only estimate.
In 2026, a $60,000 day job plus $20,000 of net side income in Ontario adds about $7,682.78 to the tax return — roughly $384 per $1,000 of side income at those marginal rates — including $2,169.40 of CPP + CPP2 on the side income, coordinated with paycheque CPP the way Schedule 8 does it. The return collects $16,003.28 in total before any T4 withholding is applied. More engine-computed examples:
| Province | Day job (T4) | Net side income | Added to the return | Per $1,000 of side income | CPP on side income | Return collects (total) | Effective rate |
|---|---|---|---|---|---|---|---|
| ON | $60,000 | $10,000 | $3,854.63 | $385 | $1,190.00 | $12,175.13 | 23.6% |
| ON | $60,000 | $20,000 | $7,682.78 | $384 | $2,169.40 | $16,003.28 | 25.4% |
| ON | $60,000 | $40,000 | $13,897.92 | $347 | $2,569.40 | $22,218.42 | 26.6% |
| BC | $60,000 | $20,000 | $7,259.78 | $363 | $2,169.40 | $15,165.47 | 24.4% |
| AB | $60,000 | $20,000 | $7,633.86 | $382 | $2,169.40 | $15,603.46 | 24.9% |
| MB | $60,000 | $20,000 | $8,159.15 | $408 | $2,169.40 | $18,046.99 | 28.0% |
Computed for the 2026 tax year by the same verified engine as the calculator above (toggle 2025 or enter your own numbers there). "Return collects" = income tax + CPP on side income before T4 box-22 withholding is applied. Effective rate counts tax + CPP + EI across everything earned. Assumes basic personal amount only. Estimates only — see the disclaimer below.
Canada's brackets are marginal: your day job fills the lower brackets first, so every side-hustle dollar lands on top — taxed at your highest rate from the first dollar. And unlike your salary, nothing is withheld when a client pays you: the tax on side income is collected when you file. That's the April surprise this page exists to prevent.
The second surprise is CPP. On your salary you pay the employee half and your employer pays the other half. On self-employment income you pay both halves — but not blindly: Schedule 8 coordinates the two, so contributions already made through your paycheque use up your contributory room first and your side income only tops up the rest. Our engine does that coordination exactly; calculators that skip it overcharge people whose day job already maxes their CPP.
Income tax isn't the only threshold your side hustle can cross. GST/HST registration becomes mandatory once your worldwide taxable sales pass the small-supplier threshold — in a single calendar quarter (you charge GST/HST from the very sale that crossed it) or over any four consecutive calendar quarters (a rolling test, not a calendar-year one). Check where you stand with the GST/HST registration calculator. Anything you collect was never yours: hold it separately from the set-aside this page computes.
Side income is reported on Form T2125 with your return — and your expenses (the "net" in net side income) need records. The free expense tracker keeps them sorted by T2125 line all year, and the T2125 generator assembles the form figures when you file. Filing dates live on the deadline calendar.
It depends on your day-job income, because side income is taxed at your highest marginal brackets. Example from this calculator: a $60,000 day job plus $20,000 net side income (2026, ON) adds about $7,682.78 to the tax return — on top of the $8,320.50 the return would collect on the day job alone.
Yes — self-employment income carries both halves of CPP, but Schedule 8 coordinates it with your paycheque: employment contributions use up your contributory room first, and side income only tops up the rest. At these inputs the side income carries $2,169.40 of CPP + CPP2, on top of the $4,339.75 of CPP + EI already withheld at work. Once your salary maxes your CPP for the year, the side-income CPP drops toward zero.
At these inputs: about $384 per $1,000 of side income (2026, ON) — computed from your true marginal rates, not the generic 25-30% rule of thumb. Any GST/HST you collect on top was never yours — hold it separately.
No. Clients pay you gross — no income tax, CPP or EI comes off. Everything owed on side income is collected through your tax return (or quarterly instalments once your balance is large enough). That's why the set-aside habit matters: the money feels like yours in July and stops feeling like yours in April.
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