Contractor Take-Home Pay Calculator
From billable hours to the money that’s really yours — expenses out, tax reserve set aside, GST/HST kept separate. Free, instant, no signup.
What you actually keep
- Gross labour
- $2,600.00
- Business expenses
- − $0.00
- Estimated profit
- $2,600.00
Add your income-tax reserve % above to see what’s actually yours to spend — leaving it blank doesn’t mean 0%.
GST/HST not calculated — registration status required.
Want to know what you keep from every shift?
ShiftFlow tracks contractor earnings and tax reserves per shift, automatically.
Track Hours with ShiftFlowHow your take-home is calculated
The waterfall runs top to bottom: gross labour, minus business expenses, is your estimated profit; minus your income-tax reserve, is what’s actually available. Worked example: 100 hours at $26/hour is $2,600 gross labour; $400 of expenses leaves $2,200 profit; a 25% reserve sets aside $550, leaving $1,650 available. These are the two numbers people confuse: in Ontario you’d invoice $2,938 (labour plus $338 HST), but your available income is $1,650 — the HST is collected for the CRA and never enters the waterfall.
Common mistakes
- Spending the HST — it sits in your account, but it belongs to the CRA.
- Treating the invoice total as income — the tax on top of your labour was never yours.
- Skipping the reserve in good months — the tax bill on a good month is bigger, not optional.
Frequently asked questions
Why is my take-home so much lower than my hourly rate?
Because your rate is revenue, not pay. Out of every billable dollar come your business expenses and the income tax you must set aside yourself — and if you charge GST/HST, that part of the invoice was never yours at all. In the worked example above, a $26/hour contract leaves about $16.50/hour actually available ($1,650 over 100 hours). That is normal, not a mistake — it is why contractor rates run higher than employee wages for the same work.
How is a contractor’s take-home different from an employee’s take-home?
An employee’s take-home is what arrives after the employer has already withheld income tax and payroll contributions — the deductions happen before the money lands. As a contractor, nobody withholds anything: the full labour amount lands in your account, and the “deductions” are your job — you set aside your own income-tax reserve and remit any GST/HST yourself. Money in the account is not money you can spend.
Is the GST/HST on my invoices mine to keep?
No. GST/HST is collected on behalf of the CRA and remitted (minus any input tax credits) — it passes through you. That is why this calculator shows it as a separate line outside the waterfall instead of a step in it: it never enters what you keep, and your tax reserve is never computed on it.
How is this different from the contractor pay calculator?
Same math, same engine, different question. The contractor pay calculator is invoice-centric: it breaks down what a contract pays — labour, GST/HST, the invoice total. This page centers the number people actually care about: after expenses and your tax reserve, what is yours to spend. If you are quoting a contract, use that one; if you are wondering what you can safely take out of the account, use this one.
What if I don’t know what reserve percentage to use?
The calculator will not guess for you: leave the reserve blank and the waterfall stops at profit, because an unentered reserve is not a 0% reserve. The right percentage depends on your total annual income, your province, and your deductions — pick a working estimate (and ask an accountant to refine it), then reserve it on profit every period, including the good months.
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.