Canadian Realtor
Tax Estimator

How much tax does a Canadian real estate agent actually pay?

Short answer: Canadian realtors typically owe 20% to 40% of net commission income in combined federal tax, provincial tax, and CPP/QPP contributions. Effective rate depends on net income, province, and whether you’re incorporated as a PREC. A sole proprietor in Ontario earning $100,000 net pays roughly $26,000 (26% effective). The same agent in Alberta pays roughly $24,000 (24% effective).

Real estate agents in Canada are classified as self-employed independent contractors, which means you report commission income on CRA form T2125. Unlike employees with income tax withheld at source, you are responsible for setting aside tax money yourself and remitting it through quarterly instalments.

What are the CRA quarterly instalment dates?

Short answer: Quarterly instalments are due March 15, June 15, September 15, and December 15. You’re required to pay instalments once you owe more than $3,000 in tax for two consecutive years ($1,800 in Quebec). Missing an instalment triggers compounding interest that cannot be deducted on your return.

CRA offers three instalment methods: the no-calculation option (pay the amounts CRA bills you), the prior-year option (one-quarter of last year’s tax per instalment), and the current-year option (estimate this year’s tax and pay one-quarter each instalment). Most agents use the no-calculation option unless income swings dramatically year-to-year.

What business expenses can realtors deduct?

Short answer: Canadian realtors can deduct brokerage desk fees, MLS dues, licensing, vehicle expenses, marketing, home office, phone, software, professional development, and more. The CRA requires expenses to be incurred for the purpose of earning commission income. Typical agents deduct 20% to 35% of gross commission as expenses.

Vehicle expenses are the most commonly audited — you must keep a detailed mileage log distinguishing business kilometres from personal. Home office is deductible based on the business-use percentage of your home (square footage) applied to utilities, property taxes, insurance, and mortgage interest (not principal). CCA (capital cost allowance) lets you depreciate vehicles, computers, and office equipment over multiple years.

See our full guide to CRA-eligible business expenses for Canadian real estate agents.

How does CPP work for self-employed realtors?

Short answer: Self-employed realtors pay both the employee and employer portions of CPP — 11.90% on earnings between $3,500 and $71,300 in 2025 (Tier 1), plus 8.00% on earnings between $71,300 and $81,200 (Tier 2). In Quebec, QPP rates are slightly higher. Half of Tier 1 and all of Tier 2 are tax-deductible.

CPP and QPP contributions are capped. The maximum CPP contribution in 2025 is approximately $8,860 (combined Tier 1 + Tier 2). Once you hit that, no further CPP is owed on additional income. Quebec’s QPP maximum is slightly higher due to the higher contribution rate.

Should I set up a Personal Real Estate Corporation (PREC)?

Short answer: A PREC is typically tax-advantageous once your net commission income consistently exceeds the small business deduction threshold (roughly $150,000 to $200,000 net). The corporate small-business tax rate is 9% federal plus 0%-4% provincial — much lower than personal marginal rates of 35%+ at that income level. Income left inside the corporation compounds at the lower rate. PRECs are permitted in Ontario, BC, Alberta, Saskatchewan, Manitoba, Nova Scotia, and are expanding to other provinces.

PRECs come with accounting complexity (separate corporate tax return, payroll, dividends, shareholder loans). Below $150,000 net, the administrative cost usually outweighs the tax savings. Talk to a CPA who works with real estate agents in your province before incorporating.