Canadian laws for freelancers

Sophia Finos wrote:

What are the Canadian laws regarding freelancers? How/when does one have to pay income tax, CPP, EI?

Also, when billing a client, do you charge them GST and PST? Are foreing countries required to pay Canadian taxes?

Any help would be greatly appreciated.
Thanks
Sophia

Sophia Finos wrote:
What are the Canadian laws regarding freelancers? How/when does one have to pay income tax, CPP, EI?

Also, when billing a client, do you charge them GST and PST? Are foreing countries required to pay Canadian taxes?

NancyLynn wrote:



As a freelancer, you are self-employed. This means you have no employer payroll cheque with federal deductions automatically taken off.

CPP you contribute on your own if you wish; you do not contribute to EI. Of course, this also means you have no unemployment insurance - you're on your own, literally.

Income tax forms must be remitted no later than April 30, though self-employment taxes are not due until June 15. This gives the government time to review your income tax return and respond with a Notice of Assessment.

The income tax deduction from your pay slip, when you work for someone else, no longer exists; and if you don't make provisions for income tax payment the following year, you will be in for a nasty surprise.

The best way to deal with this is to open a savings account for this special purpose. For each payment you receive from a client, calculate what the percentage of tax should be (usually 30-35%) and deposit that amount into your account. This way, when you receive your notice of assessment and the total is in the several thousand, you'll be prepared.