I'm starting a consulting firm based in Alberta and want to know what % of gross income I should be retaining for income tax. Estimate gross annual revenues to be CA$100K. GST is being charged on invoicing (have GST ) and will pay GST quarterly to CRA.
ThanksHow much money should be set aside for income tax for self-employed contractors in Canada?
A person who earns $100k in Alberta would owe approximately $30,000 in income taxes and CPP, so consider setting aside 30% of your income.
You will also be able to deduct from your gross income any related business expenses that you have incurred, such as business use of your vehicle, business use of a portion of your home, supplies, client entertainment etc etc. So the actual amount of tax you would owe should be less than $30k depending on how much your expenses are.
