How to use this calculator
- Enter the salary and benefits you'd get as an employee.
- Enter the contract rate you've been offered.
- Be realistic about contract hours and weeks. Contractors aren't paid for vacation or statutory holidays.
How it's calculated
Employer CPP = 5.95% × (salary up to $74,600 − $3,500)
+ 4% × (salary between $74,600 and $85,000)
Employee package = salary + benefits + employer CPP
Contract hours = hours per week × weeks per year
Break-even rate = employee package ÷ contract hours
We add the employer's CPP because as a contractor you pay both halves yourself.
Worked example
Sanjay is offered a job at $75,000 with benefits worth $8,000, or a contract at $55 an hour for 37.5 hours a week, 46 weeks a year.
Employer CPP = 71,100 × 5.95% + 400 × 4% = 4,246.45
Employee package = 75,000 + 8,000 + 4,246.45 = 87,246.45
Contract hours = 37.5 × 46 = 1,725
Break-even rate = 87,246.45 ÷ 1,725 = $50.58/hour
Contract income = 55 × 1,725 = 94,875
The contract needs at least $50.58 an hour. At $55 it's worth about $7,629 more a year, before business costs and the loss of EI cover.
What this calculator doesn't cover
- Business expenses and the deductions they bring as a contractor.
- Quebec (QPP and different EI rates).
- Whether you'd really be an independent contractor. The CRA looks at control, tools, profit and risk, not the job title.
Frequently asked questions
How much more should a contractor charge?
Enough to cover benefits, both halves of CPP, unpaid time off, business costs and gaps between contracts. That's often 20–40% more than the equivalent employee hourly pay.
Do contractors charge GST/HST?
If your taxable sales are over $30,000 in four consecutive calendar quarters, you generally have to register and charge GST/HST. Our GST/HST calculator works out the amounts.
Sources (2026): CPP rates, EI premium rates.