Tax Reserve Calculator
Figure out how much of each payment to park for income tax so filing season doesn’t hurt — free, instant, no signup.
Your labour/sales revenue, not including GST/HST you collected.
Your own number — from a tax professional or last year’s return.
Estimated profit (revenue − expenses)
$2,200.00
Enter your reserve percentage to see how much to set aside.
Setting money aside every payment?
ShiftFlow tracks income, expenses and tax reserves per shift automatically.
Get ShiftFlowHow the tax reserve is calculated
Reserve = (revenue − expenses) × your reserve percentage. Worked example: $2,600 of revenue minus $400 of expenses is $2,200 of profit; at your 25%, set aside $550 and keep $1,650.
Reserve on profit, not on your invoice total — the GST/HST you collected is remitted separately and was never yours, and expenses reduce your taxable profit.
Common mistakes
- Reserving a percentage of the gross invoice including HST — that sales tax is remitted to the government, not saved for income tax.
- Picking a percentage once and never revisiting it as income grows — higher profit usually means a higher effective rate.
- Forgetting that CPP contributions also exist on self-employed income — your filing-season bill is more than income tax alone.
Frequently asked questions
What percentage should I set aside for taxes?
There is no universal number — it depends on your income level, your province, and your credits and deductions. This calculator applies YOUR percentage; it does not suggest one. A tax professional or your last year’s return is the right source for that number. As your income grows, revisit it — a percentage that worked at $30,000 of profit will be too low at $80,000.
Do I reserve a percentage of my revenue or my profit?
Profit. Income tax is owed on your profit — revenue minus deductible business expenses — not on everything that hits your bank account. Reserving a percentage of gross revenue over-saves when you have real expenses, and reserving on an invoice total that includes GST/HST over-saves even more, because that sales tax was never your money in the first place.
Is the reserve amount my actual CRA tax liability?
No. It is a savings guideline — a disciplined way to park money so filing season doesn’t hurt. Your actual liability depends on your total income for the year, tax brackets, credits, deductions, and CPP contributions, and is only known when your return is prepared.
Does the GST/HST I collect count as income?
No. GST/HST you collect belongs to the government — you are holding it in trust and remitting it separately. Keep it out of the revenue figure you enter here, and ideally out of the account you think of as yours.
Where should my tax reserve live?
Somewhere it won’t get spent by accident: a separate account from your day-to-day money is the usual answer, and one that earns a little interest while it sits is a bonus. The mechanics matter less than the separation — a reserve mixed into your spending account tends to quietly stop being a reserve.
Related calculators
The reserve amount is a savings guideline, not your actual CRA tax liability, and this tool is not tax advice. Your liability depends on total income, brackets, credits, deductions, and CPP contributions — talk to a tax professional for your number.