If you earn side hustle income in Canada, you may owe both Canada Pension Plan (CPP) and Employment Insurance (EI) contributions, even though you're self-employed. Unlike employees who split CPP costs with their employer, self-employed side hustlers pay the full amount themselves. For 2026, you'll contribute on net self-employment income above $3,500, up to the yearly maximum. Unlike regular employees, self-employed individuals cannot claim EI unless they've voluntarily registered, which is a common source of confusion for new side hustlers. As a self-employed side hustler, you're required to pay both the employee and employer portions of CPP contributions. This means your total contribution rate is roughly double what an employee pays. Key points about CPP for side hustlers: - The CPP contribution applies to net self-employment income between $3,500 and the Year's Maximum Pensionable Earnings (YMPE) - For 2026, the YMPE is indexed annually by Statistics Canada - You calculate your contribution on Line 13100 of your tax return - You can deduct half of your CPP contribution as a non-refundable tax credit - The contribution is mandatory unless you've reached the annual maximum Unlike CPP, EI is not automatic for self-employed people.
Yes, if your net self-employment income exceeds $3,500 per year, this CRA rule may apply to you. You'll pay both the employee and employer portion of CPP (roughly double what employees pay). CPP is mandatory and calculated when you file your tax return.
No, you are not automatically covered by EI as a self-employed person. You must voluntarily register with Service Canada to have EI coverage. Without registration, you cannot collect EI benefits if your side income disappears.
CPP and EI payments are due by June 15 of the year following the tax year (so June 15, 2027 for 2026 income). This is later than the regular April 30 tax filing deadline for other taxpayers. Interest and penalties apply if you miss this deadline.
No, CPP contributions are not a business expense. However, you can claim half of your CPP contribution as a non-refundable tax credit on your return, which reduces your total tax owing but doesn't reduce your taxable income.
You won't overpay. The CRA tracks your total CPP contributions across all income sources and caps them at the annual maximum. If you've already hit the max through employment, you may not owe additional CPP on your side hustle income.