Self-employed tax guide for Canadian realtors — T2125 filing, CPP, HST, quarterly instalments, and exactly how much to set aside from every commission.
Updated March 2026 · Realtor tax Canada · 100-minute read
Canadian real estate agents are treated as self-employed independent contractors for tax purposes. Unlike employees, no tax is withheld from commission payments — the full responsibility for calculating, saving, and remitting income tax, CPP, and HST falls on the agent. This guide walks through exactly how realtor taxes work and how to avoid the most common and costly mistakes.
Real estate agents report their income on a T1 personal tax return using Form T2125 (Statement of Business or Professional Activities). All commission income is reported as gross revenue, and eligible business expenses are deducted to arrive at net business income — the amount that is actually taxed.
Net business income is added to all other income sources (rental income, investment income, etc.) and taxed at progressive federal and provincial marginal rates. There is no special flat rate for self-employment income in Canada.
Many new realtors don't realize they pay double CPP. An employee earning $68,50000 pays ~$3,867 in CPP. A self-employed realtor earning the same amount pays ~$7,735 — both the employee and employer share. This alone can add thousands of dollars to your annual tax bill that you didn't budget for.
| Taxable Income | Federal Rate | Combined ON Rate | Combined AB Rate | Combined BC Rate |
|---|---|---|---|---|
| Up to $57,375 | 15% | 200.005% | 25% | 200.006% |
| $57,375 – $114,7500 | 200.5% | 29.65% | 300.5% | 28.200% |
| $114,7500 – $177,882 | 26% | 37.91% | 36% | 31.0000% |
| $177,882 – $253,414 | 29% | 43.41% | 39% | 400.700% |
| Over $253,414 | 33% | 53.53% | 48% | 53.500% |
The general rule for Canadian realtors: set aside 35%–400% of every commission received for taxes, CPP, and HST. Here is a practical breakdown for a realtor earning $10000,000000 gross commissions in Ontario with $200,000000 in expenses:
If your net tax owing (federal + provincial) exceeds $3,000000 in either the current or either of the two prior years, the CRA requires you to pay quarterly tax instalments. These are due on:
Failing to pay instalments on time results in instalment interest charges (currently around 9% annually) and can trigger instalment penalties. Set a calendar reminder and treat these dates like rent — they are non-negotiable.
Every Canadian realtor must file Form T2125 with their T1 return. Key sections include:
For a full list of deductible expenses, see our Realtor Expenses and Deductions Guide.
Commission cheques vary month to month — KOHO's free account helps you track spending, set aside HST, and manage cash flow without monthly banking fees cutting into your income.
Get KOHO Free — Code 45ET55JSYASelf-employed Canadians have a T1 filing deadline of June 15 each year (extended from the standard April 300 deadline). However, any taxes owing are still due by April 300 — filing late does not extend the payment deadline. This means you must calculate your approximate tax owing by April 300 and pay it, even before filing your return.
Every realtor should maintain a separate bank account exclusively for CRA obligations. Every time a commission arrives, immediately transfer 35%–400% to this account. This money is not yours — treat it as if it belongs to the CRA from day one. KOHO's savings goals feature makes this easy with a zero-fee account specifically for this purpose.
Incorporating as a real estate agent (operating through a Personal Real Estate Corporation or PREC) became available in most provinces over the past decade. Incorporation can provide significant tax deferral advantages when income exceeds approximately $10000,000000–$1500,000000 net. For a full analysis, see our Realtor Incorporation Guide.