Contractor Pay Calculator
See what a contract really pays — labour, GST/HST, expenses, and what to set aside. Free, instant, no signup.
Estimated profit
$2,600.00
- Labour revenue
- $2,600.00
- Business expenses
- $0.00
- Estimated profit
- $2,600.00
GST/HST not calculated — registration status required.
Doing this math for every invoice?
ShiftFlow tracks contractor earnings, GST/HST and tax reserves automatically.
Track Hours with ShiftFlowHow contractor pay is calculated
Labour revenue = billable hours × hourly rate. If you are GST/HST-registered, the tax is charged on top of labour — not carved out of it. Worked example: 100 hours at $26/hour is $2,600 labour; in Ontario, 13% HST adds $338, so you invoice $2,938. That $338 is collected for the CRA, not earned. With $400 of business expenses, profit is $2,200, and a 25% income-tax reserve — computed on that $2,200 profit, never on the invoice total — sets aside $550, leaving $1,650 available.
Common mistakes
- Treating the HST you collect as income — it passes through you to the CRA.
- Reserving income tax on the invoice total instead of profit — the invoice includes sales tax that was never yours.
- Forgetting that business expenses reduce your taxable profit before any reserve.
Frequently asked questions
Is the GST/HST I collect part of my income?
No. GST/HST is charged on top of your labour and collected on behalf of the CRA — you remit it (minus any input tax credits). On a $2,600 invoice with 13% HST, the $338 tax passes through you; only the $2,600 labour is your revenue. Spending it as if it were earnings is one of the fastest ways contractors get into trouble at remittance time.
What percent of my income should I reserve for income tax?
It depends on your total income for the year, your province, and your other deductions — there is no single right number, which is why this calculator uses the percentage you choose rather than suggesting one. Whatever you pick, the reserve should be computed on profit (labour minus expenses), never on the tax-inclusive invoice total.
Do unregistered contractors charge GST/HST?
No. If you are not registered for GST/HST, you do not charge it on your invoices at all. The CRA has a small-supplier concept under which lower-revenue businesses generally are not required to register; whether registering anyway makes sense for you (for example, to claim input tax credits) is a question for an accountant.
Why is the tax reserve based on profit and not my invoice total?
Because income tax is owed on what you earn, not on what you invoice. The invoice total includes GST/HST that was never yours, and your billable revenue includes expenses that reduce your taxable profit. Reserving a percentage of the invoice total over-reserves on money you must remit anyway; reserving on profit matches how the tax is actually assessed.
What counts as a business expense?
Generally, reasonable costs you incur to earn business income — things like tools and equipment, software, insurance, professional fees, and the business-use portion of shared costs. The rules on what is deductible and in what proportion are the CRA’s, not this calculator’s: enter your best estimate for the period and confirm specifics with an accountant.
Does this calculator include PST or QST?
No. It uses verified GST/HST rates only. In provinces with a separate provincial sales tax (British Columbia, Saskatchewan, Manitoba, Quebec) the calculator shows a disclosure that PST/QST is not included — those taxes have their own registration and remittance rules.
Related calculators
Results are estimates for informational purposes only, not tax, accounting, or legal advice, and do not represent your actual CRA liability. GST/HST obligations, deductible expenses, and income-tax rates depend on your circumstances — confirm with an accountant.