Canada Contractor Day Rate Calculator

15% to 25% is a reasonable range for an incorporated contractor drawing a salary from their own corporation, to compensate for unpaid leave and lack of job security. An unincorporated sole proprietor typically needs a higher 20%-30% loading, since they also pay both the employee and employer halves of CPP (Canada Pension Plan) with no employer to split the contribution with.

Multiply your target base salary by your contractor loading factor (1 plus your loading %), then divide by your realistic billable days for the year (230 is a common default). For example, a C$130,000 base salary with an 18% incorporated loading over 230 billable days works out to roughly $665/day. The calculator above runs this for your own numbers, plus the reverse: enter a day rate to see the permanent salary it's equivalent to.

Divide your day rate by your standard billable hours per day, typically 7.5-8 hours in Ontario. A C$600/day rate at 8 hours works out to roughly C$75/hour. Most Canadian tech contracts bill by the day, so this is mainly useful for comparing against hourly-rate roles or part-day engagements.

It depends on your structure. An incorporated contractor paying themselves a salary from their own corporation has CPP deducted the normal employee way (this calculator's incorporated structure is a direct employee-equivalent passthrough). An unincorporated sole proprietor pays both the employee and employer halves of CPP on net business income and is not required to pay EI premiums at all, unless they voluntarily opt in to the separate EI Special Benefits for Self-Employed People program. Always confirm your structure before comparing a quoted rate to a permanent salary.

Both incorporated and unincorporated contractors are taxed at the same progressive federal + Ontario personal rates as an employee on their respective income (salary drawn from a corporation, or net business income for a sole proprietor). Canada has no IR35-style test that changes an individual contractor's personal tax rate the way the UK does; the CRA's closest analogue, the personal-services-business test, affects the corporate tax rate a contractor's own company pays, not modelled here.

A full Canadian working year is 260 days (52 weeks x 5 days), but a contractor doesn't get paid for all of them. Subtract 9 Ontario statutory holidays, 15 days of paid-leave-equivalent buffer, and 5 sick or bench days, and you land at roughly 230 billable days. The calculator lets you adjust this if your own gaps between contracts differ.

Incorporated means you've set up your own corporation and pay yourself a salary (or salary plus dividends, not modelled here) from it — this calculator's incorporated mode is a direct employee-equivalent passthrough, without modelling the corporation's own small-business-deduction tax rate. Sole proprietor means you invoice clients directly as an individual, with no corporate layer — you're taxed on net business income at personal rates, but you pay double CPP with no EI. Most professional Canadian tech contractors incorporate once their rate is high enough to justify the accounting overhead.