When you are an employee, your employer pays into the Canada Pension plan, and also deducts money from each of your paycheques to submit on your behalf.....when you're self-employed, you pay both portions yourself! It is about 10% of your NET earnings. When you file your income tax you would also fill out a form (Schedule 8) that determines how much you have to pay for the year. You are then able to deduct 50% of that amount as a reduction in your net income, and also can apply 50% of the amount as a tax credit.