Can I freelance or start a business in Canada?
Freelancing and small businesses are common in Canada and cheap to start. Whether you can do it depends first on your immigration status, so check that before you take on a client. Then come the tax rules, which put more on you than PAYE does in the UK.
In 30 seconds
- Open permits, such as an IEC Working Holiday, can allow self-employment. Employer-specific permits don’t: you can only work for the employer named on yours
- Register for GST/HST once your taxable sales pass C$30,000 over four calendar quarters. As a self-employed person you pay both halves of CPP: 11.9% in 2026
- The Start-up Visa closed to new applicants in December 2025, and the Self-Employed Persons Program has been paused since April 2024
Check your permit first
| Your status | Can you freelance? |
|---|---|
| Permanent resident or citizen | Yes |
| IEC Working Holiday (open permit) | Generally yes. IRCC says it may allow you to register a Canadian corporation for self-employment, though an officer decides |
| Other open permits, such as a partner’s open permit | Usually, but check the conditions printed on your permit |
| Employer-specific permit, including IEC Young Professionals and Co-op | No. You must have an employer–employee relationship with the employer named on it |
Your employment contract may also limit outside work. If in doubt, ask a licensed immigration consultant (RCIC) or lawyer. See which permit you need.
Sole proprietor or corporation?
| Sole proprietorship | Corporation | |
|---|---|---|
| Set-up | Simplest. You can start straight away under your own name | Incorporated federally or in your province, with yearly filings |
| Tax | Profit is added to your personal income and taxed at your personal rates | A Canadian-controlled private corporation pays a federal rate of 9% on its first C$500,000 of active business income (15% above), plus provincial tax. You pay personal tax on what you take out |
| Liability | You’re personally liable for business debts | The company is a separate legal person |
| Good for | Freelancing and testing an idea | A growing business with profits to keep in the company |
Provincial rates differ, and Quebec raised its small business rate from 8.3% to 9.3% for tax years starting after 29 April 2026. A CPA can help you choose.
Business number and GST/HST
- A sole proprietor files income tax under their SIN and only needs a CRA business number (BN) once they need a program account: GST/HST, payroll if you hire staff, or import-export. You register online through Business Registration Online
- You must register for GST/HST once your taxable sales pass C$30,000 over the last four calendar quarters. If you pass C$30,000 in a single quarter, you must charge tax from the sale that takes you over
- Below the threshold you’re a “small supplier” and can register voluntarily, which lets you claim back GST/HST on business costs
- In Quebec, you register for GST and QST with Revenu Québec, with the same C$30,000 limit
CPP: you pay both halves
An employee pays 5.95% towards the Canada Pension Plan and the employer matches it. Self-employed, you pay both: 11.9% of net self-employment earnings between C$3,500 and C$74,600 in 2026, up to C$8,460.90. On earnings between C$74,600 and C$85,000 you also pay CPP2 at 8%, up to C$832. You pay it with your tax return. In Quebec you pay into the Quebec Pension Plan instead. See pensions and savings.
Set tax aside and pay by instalments
No one takes tax off what clients pay you, so move part of every payment into a separate account. You may have to pay tax by instalments if your net tax owing is more than C$3,000 (C$1,800 in Quebec) this year and in either of the two years before. Instalments are due on 15 March, 15 June, 15 September and 15 December, and the CRA sends reminders. See tax in Canada.
Business immigration routes in 2026
If you hoped to come or stay through a business route, the options have narrowed:
- Start-up Visa: IRCC stopped taking new work permit applications on 19 December 2025 and new permanent residence applications on 31 December 2025. People with a 2025 commitment certificate had until 30 June 2026 to apply
- New entrepreneur pilot: IRCC said a more selective pilot would launch in 2026. Details hadn’t been published by May 2026
- Self-Employed Persons Program: paused since April 2024, until further notice
- Ontario: the provincial nominee Entrepreneur stream was also unavailable in 2026. Other provinces run their own business streams
Check IRCC for the new pilot before you plan around it See permanent residence.
What to do next
- Check the conditions printed on your work permit
- Open a separate account for tax, GST/HST and CPP
- Track your sales each quarter so you know when you pass C$30,000
Keep going
- Moving2Canada: Working Holiday visa and self-employment
- Barrett Tax Law: The small business deduction
- Revenu Québec: Increase in the small business deduction rate (May 2026)
- Canada Revenue Agency: When you need a business number or CRA program accounts
- TaxTips.ca: GST/HST small supplier
- Revenu Québec: Small suppliers (GST and QST)
- Canada Revenue Agency: CPP contribution rates, maximums and exemptions
- Insights CPA: CPP2 second additional contributions 2026
- Canada Revenue Agency: Who has to pay tax by instalments
- Nihang Law: Canada Start-Up Visa program closed, what it means in 2026 (May 2026)
- IRCC: Start-up Visa Program
- Immigration2Canada: Canada shakes up entrepreneur immigration (Dec 2025)