Being self-employed means being your own boss. Your profits and losses are considered your income, and you must report them in your tax return. You may also have to register for the GST/HST and QST. Read on to learn more.
When you hire an employee, you must:
As soon as your sales of taxable goods and services exceed $30,000 in a given calendar quarter or total that amount for the past four calendar quarters, you have to register for the GST/HST and QST.
Once registered, you have to collect the GST/HST and QST on your sales of taxable goods and services, file returns and remit the tax you collected.
However, you will be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST and QST paid or payable on goods and services you acquired in the course of your business.
A fiscal period is a period of no more than twelve months, at the end of which a business prepares its financial statements.
Fiscal periods normally run from January 1 to December 31. Since you’re self-employed, your fiscal period must end on December 31 for your Québec income tax return.
However, if you elect to have a fiscal period end on a date other than December 31 for your federal income tax return, you must use this same date for your Québec income tax return.
You have to report your business income from self-employment. To help you report your business income and expenses, you can use form TP-80-V, Business or Professional Income and Expenses. You must enclose the form with your income tax return.
Note that you can submit your financial statements instead of form TP-80-V.
Office and computer equipment is considered capital property, for which you can claim capital cost allowance. If you’re registered for the GST/HST and QST, you can claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST/HST and QST paid or payable on equipment purchased for your business.
Being self-employed, you can deduct eligible expenses related to the use of part of your home for business purposes if:
To determine how much you can deduct, you must use a reasonable method to figure out to what extent the expense is a business expense if it is related to both your home office and the rest of your home (for example, you can calculate what percentage of the total surface area of your home is occupied by the office).
You can deduct some expenses related to the use of a motor vehicle or zero-emission vehicle, based on the extent to which you used the vehicle for your business. To determine the business use percentage, divide the number of kilometres travelled for business reasons by the total number of kilometres travelled by the vehicle during the fiscal period.
You have until June 15 to file your return. If you have income tax to pay, it will bear interest as of May 1 until it is paid.
If you are not self-employed, you have until May 1, 2023, to file your 2022 income tax return and pay any income tax without us charging interest or penalties since April 30—the usual filing and payment deadline—is a Sunday.
You can pay a balance of income tax due:
If you’re unable to pay your balance by the deadline, we can make a payment agreement together.
Self-employed workers pay income tax every year. Instalment payments are partial payments made four times a year to cover your income tax, contributions to the Québec Pension Plan (QPP) and the health services fund, and premiums payable under the Québec parental insurance plan and the Québec prescription drug insurance plan. Making instalment payments is mandatory in some situations.
Tax credits and deductions if you’re self-employed
There are two types of tax credits: refundable and non-refundable. Refundable tax credits are paid to you even if you have no income tax payable, whereas non-refundable tax credits reduce or cancel your income tax payable.
Deductions are amounts you subtract from your income before calculating your income tax.
Tax tools for the self-employed – Income tax
Read this publication if you’ve just started your own business or are about to.
This document has information on how to calculate, collect and remit the GST/HST and QST.
This document informs self-employed workers of their tax rights and obligations.
This document is for individuals who are required to file an income tax return and who carry on a business or professional practice as the sole proprietor or as a member of a partnership.
This guide contains the information you need to meet your obligations with regard to source deductions and employer contributions as an employer or payer.
The assistance program helps individuals in business and small and medium-sized businesses understand their tax obligations at various stages of their business’s life cycle.
This section of our website explains the main tax obligations of self-employed workers.
This section of our website contains information about source deductions and employer contributions.
Use this tool to find out whether you can use the Quick Method of Accounting and estimate the amount of the reduction in GST/HST and QST to remit if you can.
Use this tool to calculate source deductions of Québec income tax, Québec Pension Plan (QPP) contributions and Québec parental insurance plan (QPIP) premiums, as well as employer contributions for the QPP, QPIP and health services fund.
If you’re self-employed, see our website to learn about your tax obligations and benefits.