Freelance Rate Calculator
Your old salary is not your freelance hourly rate. Your minimum rate has to cover the pay you want plus the employer CPP match, unbillable time, vacation, and the unpaid gaps a paycheque used to hide.
Rates & rules verified · July 2026Primary sources: CRA – Tax rates and income brackets · CRA – CPP contribution rates and maximums · CRA – EI premium rates and maximums · Revenu Québec – Income tax rates
Where your rate comes from
How the employee figure (salary ÷ 2,080 hours) grows into your minimum rate: weeks off, unbilled hours, business expenses, the employer half of CPP and your buffer each add to it.
Your rate by billable hours and weeks off
The hourly rate you need for each mix of billable hours and time off, with your income, expenses and buffer held fixed.
How this is calculated
The employer burden employees never see
A salary is only part of what an employee costs. Their employer also pays the matching half of CPP, EI at 1.4× the employee rate, plus vacation, statutory holidays, sick days and benefits, together worth roughly 12–18% on top of base pay. As a freelancer you shoulder all of it. That's why dividing a salary by 2,080 hours (52 × 40) badly underprices your work.
The extra CPP you pay
Self-employed Canadians pay both halves of the Canada Pension Plan on their net self-employment income: 11.90% (5.95% twice) from the $3,500 exemption up to the $74,600 YMPE, then 8.00% (4.00% twice) up to the $85,000 CPP2 ceiling (2026 figures). The extra employer half versus an employee is total ÷ 2, and it's added straight into your required revenue.
That contribution is charged on more than your target. To pay yourself the target and the employer half, your net self-employment income has to be target + employer half, and CPP applies to all of it, so the calculator solves for the employer half that matches that larger base. Deducting the employer half on your return (line 22200) brings your taxable income back to the target, the same as the salaried job. Once net income passes the CPP2 ceiling the contribution is at its maximum and this changes nothing; below it, it adds up to a few hundred dollars a year.
Quebec: QPP and QPIP
In Quebec you pay both halves of the Quebec Pension Plan instead, at a higher rate on the same earnings ceilings, and the Quebec Parental Insurance Plan is mandatory for the self-employed at a higher premium than employees pay. The extra cost is the employer half of QPP plus the gap between the self-employed and employee QPIP premiums, both on the same net self-employment income.
No EI (usually)
Self-employed workers don't pay regular EI and can't claim regular EI benefits. You may opt in to EI special benefits (parental, sickness, caregiving) via a voluntary CRA agreement, which then charges the employee EI rate. Because most freelancers don't, EI isn't added here, but budget for it if you plan to opt in.
The formula
Required revenue = (target income + expenses + employer-half CPP) × (1 + buffer%). The buffer covers unpaid gaps between contracts and clients who pay late or not at all. Billable hours per year = hours/week × (52 − weeks off). Your minimum rate = required revenue ÷ billable hours, shown rounded up to the next $5 (round numbers quote better), with the exact figure beneath. Day rate uses a 7.5-hour day; the monthly retainer is required revenue ÷ 12.
Where your rate comes from (the build-up chart)
The chart starts from the employee figure, target ÷ 2,080, and adds one piece at a time, in dollars per billable hour. Weeks off = target ÷ (40 × weeks worked) − target ÷ 2,080: the same income over fewer full 40-hour weeks. Unbilled hours = target ÷ billable hours − target ÷ (40 × weeks worked): the same weeks, but paid only for the hours you invoice (negative if you bill more than 40). Then expenses and the employer-half contributions, each divided by your billable hours, and the buffer, (target + expenses + contributions) × buffer% ÷ billable hours. The pieces add up exactly to the minimum rate. Weeks off are counted first, at a full 40-hour week; the two time pieces overlap, so their split depends on that order, but their sum does not.
The billable hours and weeks off grid
Each cell is required revenue ÷ (hours a week × (52 − weeks off)), the same formula as the headline, rounded up to the next $5 the same way. Required revenue is the same in every cell, because your income, expenses, contributions and buffer do not depend on how you split your time. Your own hours and weeks off are always a row and a column, so the outlined cell is your headline rate. The CSV export has the exact figures.
GST/HST registration at $30k
Once your taxable revenue crosses $30,000 over four consecutive quarters you must register for GST/HST and charge it on top of your rate. It doesn't change the rate you need to earn, but it's real cash flow and paperwork, use the HST/GST Quick Method vs Regular calculator to choose how to remit it and keep more of it.
Sole prop vs incorporation
Below roughly $100k of profit that you fully spend, a sole proprietorship is usually simplest and cheapest; incorporation starts to pay off mainly when you can leave profit in the company to defer tax or need liability protection, talk to an accountant before deciding.
What this doesn't model
Income tax itself (your target is pre-tax, see the income tax calculator), GST/HST cash flow, RRSP/retirement saving beyond CPP, or the value of benefits you may want to self-fund.
Common questions
Why can't I just charge my old salary as an hourly rate?
A $90,000 salary divided by 2,080 working hours looks like about $43/hour, but that number is a trap. As an employee your employer also paid the other half of your CPP, EI at 1.4×, your vacation, statutory holidays, sick days and benefits, worth roughly 12–18% on top of salary. As a freelancer you cover all of that yourself, and you only get paid for billable hours, not the time you spend on sales, admin and unpaid gaps.
How much extra CPP do self-employed Canadians pay?
Self-employed people pay both halves of the Canada Pension Plan, the employee portion and the employer portion. In 2026 the maximum combined base contribution is about $8,460 plus up to $832 of CPP2, so the extra employer half you cover versus an employee can reach roughly $4,646 a year at or above the maximum pensionable earnings ($74,600 YMPE, $85,000 for CPP2).
How many hours a week can a freelancer actually bill?
Most freelancers bill only 50–60% of a 40-hour week, the rest goes to finding clients, quoting, invoicing, email, bookkeeping and learning. Billing 25 hours out of a 40-hour week is realistic; assuming 40 billable hours will leave you badly underpriced. The calculator lets you set billable hours per week and weeks off for vacation, sickness and admin, then divides your required revenue only over the hours you can actually invoice.
Do freelancers pay EI in Canada?
No, self-employed workers do not pay regular EI premiums and cannot collect regular EI benefits. You may opt in to EI special benefits (maternity, parental, sickness, caregiving) through a voluntary agreement with the CRA, which then charges the employee EI rate. Because most freelancers skip this, the calculator does not add EI to your required revenue by default.
When do I have to register for GST/HST as a freelancer?
Once your taxable revenue crosses $30,000 over four consecutive calendar quarters (or in a single quarter) you must register for GST/HST and start charging it. GST/HST is collected on top of your rate and remitted to the CRA, so it does not change the rate you need to earn, but it is extra cash flow and paperwork to plan for. See the HST/GST Quick Method vs Regular calculator to choose how to remit it.