# T2125 - having trouble coming to the right tax **URL:** \ **Category:** T1\ **Created:** [March 27, 2017, 1:33am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248 "2017-03-27T01:33:48Z")\ **Posts on this page:** 18\ **Page:** 1
**Author:** ![yonin](https://avatars.discourse-cdn.com/v4/letter/y/45deac/32.png) [@yonin](https://www.protaxcommunity.com/u/yonin)\ **Post date:** [March 27, 2017, 1:33am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/1 "2017-03-27T01:33:48Z")
Hi Everyone, I am totally lost with this reporting. My client has a straight forward (Self employed) business income of $36,671 and has no home office or any expense to offset the income. So I decided to use quick method to reduce his HST payable. Applicable rate is 8.8% for 13% HST rate so I have the following (fees 36,671, HST payable 2,863 and Adjusted business income 33,908). I don’t understand how he can still come up with tax due of $8,000 Can anyone help ![](https://us1.discourse-cdn.com/flex016/uploads/taxcycle/original/1X/58ba3c78b404708a2536fc3d896498bc91801847.png) ---
**Author:** ![yonin](https://avatars.discourse-cdn.com/v4/letter/y/45deac/32.png) [@yonin](https://www.protaxcommunity.com/u/yonin)\ **Post date:** [March 27, 2017, 1:51am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/2 "2017-03-27T01:51:38Z")
![](https://us1.discourse-cdn.com/flex016/uploads/taxcycle/original/1X/cbf9272a5271e0c556c6d8fd3479e0135de9a767.png) Here is the breakdown how can he have to pay so much CPP ---
**Author:** ![matthew](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/matthew/32/85_2.png) [@matthew](https://www.protaxcommunity.com/u/matthew)\ **Post date:** [March 27, 2017, 2:05am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/3 "2017-03-27T02:05:17Z")
The CPP calculation is absolutely correct. He gets to pay the employee’s and the employers portion since he is self employed. ---
**Author:** ![yonin](https://avatars.discourse-cdn.com/v4/letter/y/45deac/32.png) [@yonin](https://www.protaxcommunity.com/u/yonin)\ **Post date:** [March 27, 2017, 2:50am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/4 "2017-03-27T02:50:43Z")
I found what was wrong, I had to deduct the employer contributions as an expense. It’s not much but it reduces taxes a little bit. ---
**Author:** ![joe.justjoe1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/joe.justjoe1/32/220_2.png) [@joe.justjoe1](https://www.protaxcommunity.com/u/joe.justjoe1)\ **Post date:** [March 27, 2017, 3:33am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/5 "2017-03-27T03:33:55Z")
Assuming that this taxpayer is allowed to make such a HST election ([http://www.cra-arc.gc.ca/E/pub/gp/rc4058/rc4058-e.html#P107\_6535](http://www.cra-arc.gc.ca/E/pub/gp/rc4058/rc4058-e.html#P107_6535) (And assuming that such eligible election had been made by due date) It seems that the tax payable is about $8,079.53 However, from the description, it sounds like this taxpayer is not actually self-employed? I would inquire further. ---
**Author:** ![yonin](https://avatars.discourse-cdn.com/v4/letter/y/45deac/32.png) [@yonin](https://www.protaxcommunity.com/u/yonin)\ **Post date:** [March 27, 2017, 3:57am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/6 "2017-03-27T03:57:09Z")
Yes, I read the CRA requirements. he can use the quick method. But what makes you think he’s not self employee? He works for an agency that pays him as a contractor. Although he could work from home and claim home office he leaves in shared apartment wih roommates so there is no basis for claiming home expenses. and because it’s a service, he has no other expenses to claim maybe phone or transportation but even so, CRA could easily deny those claims. ---
**Author:** ![joe.justjoe1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/joe.justjoe1/32/220_2.png) [@joe.justjoe1](https://www.protaxcommunity.com/u/joe.justjoe1)\ **Post date:** [March 27, 2017, 4:38am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/7 "2017-03-27T04:38:28Z")
“He works for an agency” - ok,so you say that he is an employee of the agency then?.. ---
**Author:** ![TimParris](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/timparris/32/240_2.png) [@TimParris](https://www.protaxcommunity.com/u/TimParris)\ **Post date:** [March 27, 2017, 11:16am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/8 "2017-03-27T11:16:42Z")
@joe.justjoe1 It is frequent that employment agencies provide T4 slips to their contractors. See [http://www.cra-arc.gc.ca/E/pub/tg/rc4120/rc4120-e.html#P749\_70858](http://www.cra-arc.gc.ca/E/pub/tg/rc4120/rc4120-e.html#P749_70858) But, the software will automatically calculate the deduction for CPP, so I am a little confused here. I think that we have half of the story. ---
**Author:** ![james1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/james1/32/47_2.png) [@james1](https://www.protaxcommunity.com/u/james1)\ **Post date:** [March 27, 2017, 1:33pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/9 "2017-03-27T13:33:48Z")
I am not really sure what you want for an answer; however, CPP x two for the business income plus the taxes owing on the 33,000 would be my guess. Have you looked at the t1summary? Edit, the answers from everyone else did not show up until I posted this. Wierd ---
**Author:** ![yonin](https://avatars.discourse-cdn.com/v4/letter/y/45deac/32.png) [@yonin](https://www.protaxcommunity.com/u/yonin)\ **Post date:** [March 29, 2017, 6:20am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/10 "2017-03-29T06:20:46Z")
Yes the calculation is right I was shocked at first but realized later that the calculation was right, I just has to claim the employer contribution as expenses and go for a quick method. ---
**Author:** ![joe.justjoe1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/joe.justjoe1/32/220_2.png) [@joe.justjoe1](https://www.protaxcommunity.com/u/joe.justjoe1)\ **Post date:** [March 29, 2017, 9:04am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/11 "2017-03-29T09:04:07Z")
> [@yonin](#): > > I just has to claim the employer contribution as expenses What is that? There is no such thing… 😕 In any case, I would first inquire further into the matter of the T slip that the Agency was almost certainly required to file… ---
**Author:** ![james1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/james1/32/47_2.png) [@james1](https://www.protaxcommunity.com/u/james1)\ **Post date:** [March 29, 2017, 1:38pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/12 "2017-03-29T13:38:23Z")
> [@yonin](#): > > claim the employer contribution Yeah you may want to reconsider this if you are trying to write this off twice. ---
**Author:** ![kytax2015](https://avatars.discourse-cdn.com/v4/letter/k/d9b06d/32.png) [@kytax2015](https://www.protaxcommunity.com/u/kytax2015)\ **Post date:** [March 29, 2017, 5:37pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/13 "2017-03-29T17:37:56Z")
yeah there shouldn’t be any entry needed. It should be automatic done by software. ---
**Author:** ![james1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/james1/32/47_2.png) [@james1](https://www.protaxcommunity.com/u/james1)\ **Post date:** [March 29, 2017, 5:39pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/14 "2017-03-29T17:39:24Z")
[quote=“kytax2015, post:13, topic:1248, full:true”] yeah there shouldn’t be any entry needed. It should be automatic done by software. [/quote]Not sure about that ---
**Author:** ![kytax2015](https://avatars.discourse-cdn.com/v4/letter/k/d9b06d/32.png) [@kytax2015](https://www.protaxcommunity.com/u/kytax2015)\ **Post date:** [March 29, 2017, 6:00pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/15 "2017-03-29T18:00:42Z")
there a deduction for CPP on line 222 for self-employment. ---
**Author:** ![james1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/james1/32/47_2.png) [@james1](https://www.protaxcommunity.com/u/james1)\ **Post date:** [March 29, 2017, 6:25pm UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/16 "2017-03-29T18:25:01Z")
Misunderstood what you were saying. When I read your post, some reason I thought you were saying that the program did not automatically do that. ---
**Author:** ![dklassencga](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/dklassencga/32/126_2.png) [@dklassencga](https://www.protaxcommunity.com/u/dklassencga)\ **Post date:** [April 3, 2017, 4:42am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/17 "2017-04-03T04:42:20Z")
You don’t deduct the employer portion of CPP when the guy is self-employed. The tax credit shows up on Schedule 1 for 1/2 the CPP owing. Line 9060 on the T2125 is for employees this fellow may employ NOT his own contributions. The original amount due you were surprised about is correct. ---
**Author:** ![allen.scantland](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/allen.scantland/32/3945_2.png) [@allen.scantland](https://www.protaxcommunity.com/u/allen.scantland)\ **Post date:** [June 24, 2025, 4:01am UTC](https://www.protaxcommunity.com/t/t2125-having-trouble-coming-to-the-right-tax/1248/18 "2025-06-24T04:01:26Z")
Did they register for GST/HST? Are the register under the quick method? No, then they cannot claim ITCs, but as they are no longer a small supplier they will have to register.When depends on when they exceeded the threshold. All SE individuals earning more than $3500 have to remit CPP premiums.