The freelance business: taxes, insurance, equipment and incorporation

Every freelance camera crew member runs a small business, even when most of their income arrives through payroll. They decide what equipment to buy, how to insure it, how to save for slow periods, how to handle taxes on kit rentals and contractor work and, later in a career, whether to incorporate. Good business habits turn uneven freelance income into a stable life; poor habits lead to tax bills that cannot be paid and gear that never earns back its cost. This lesson covers record keeping, taxes, insurance, equipment decisions and incorporation in Canada and the US at a general level.

Record keeping

The foundation of a freelance business is good records.

• Keep every pay stub, tax slip or form, invoice and receipt, organized by year.
• Use a simple spreadsheet or bookkeeping app to track income by source: payroll wages, kit rentals and contractor invoices.
• Track expenses: equipment, repairs, insurance, phone, software, training, union dues and work-related travel.
• Keep a mileage log if you claim vehicle expenses, recording dates, destinations and business purposes.
• Separate business and personal money with a dedicated bank account for kit rentals and invoices.

Records support tax returns, prove income when applying for loans or mortgages and help you understand which parts of your work actually make money.

Income tax and CPP in Canada

Camera crew in Canada often have more than one kind of income in a year.

• Employment income from payroll jobs, reported on T4 slips, with income tax, CPP contributions and EI premiums deducted at source.
• Self-employment or business income from contractor invoices and kit rentals, reported on Form T2125 with your personal return, with expenses deducted.
• Self-employed people pay both the employee and employer shares of CPP on net self-employment income: 11.9 % in 2026 up to the yearly maximum pensionable earnings of 74,600 dollars, plus the second additional contribution (CPP2) of 8 % on earnings between 74,600 and 85,000 dollars.
• If you owe more than 3,000 dollars of tax at filing time in the current year and either of the two previous years, the CRA may ask you to pay instalments during the year.
• Union dues, many equipment costs, depreciation through capital cost allowance and other work expenses may be deductible, depending on whether you are an employee or self-employed for that income; employees can deduct only certain expenses, such as union dues and some costs their employer requires.

Quebec residents file a separate provincial return with Revenu Québec and contribute to the Quebec Pension Plan instead of the CPP.

Setting money aside

Freelancers who receive kit rentals or contractor payments without deductions must set money aside for taxes. A simple rule used by many crew is to move a fixed share of every untaxed payment, such as 25 to 35 %, into a separate savings account. The right share depends on income, deductions and province or state; an accountant can help set it. Crew should also build an emergency fund covering several months of expenses, because work can stop suddenly, as it did during the pandemic and the 2023 strikes.

Insurance

Camera crew need several kinds of insurance.

• Equipment insurance: covers owned gear against theft, loss and damage, including on set and in vehicles. Productions often insure rented kit while it is in their care, but the deal memo should say so.
• Liability insurance: protects against claims for injury or damage caused by your work, required by some productions and rental houses, especially for owner-operators of specialty equipment.
• Health, dental and disability coverage: union plans cover many crew, but non-union freelancers need their own; disability insurance replaces income if injury or illness stops work.
• Vehicle insurance: personal policies may not cover business use, so tell your insurer if you use your vehicle for work.

Shop around: some industry associations and unions offer group insurance plans for members.

Buying versus renting equipment

Owning equipment can earn kit rental income and make you more attractive to hire, but equipment loses value, needs repairs and insurance and can become obsolete quickly.

Incorporation in Canada

Some senior camera crew, especially DPs with high contractor or rental income, incorporate a company. A Canadian-controlled private corporation can access a low small business tax rate on active business income and allow income to be paid out as salary or dividends. But incorporation has costs and risks: accounting fees, separate tax returns and the personal services business rules. If a corporation provides the services of one person who would otherwise be an employee of the production, the CRA may treat it as a personal services business, taxed at a high corporate rate with limited deductions. Many camera crew on payroll productions are employees regardless of incorporation, so incorporation suits mainly those with substantial non-payroll income. Get professional advice before incorporating.

Retirement and long-term savings

Freelancers do not have employer pension plans unless they work under union agreements that contribute to retirement plans. Saving for retirement is therefore a personal responsibility for much of a camera career.

In Canada, registered retirement savings plans (RRSPs) offer a tax deduction for contributions within limits based on earned income, and tax-free savings accounts (TFSAs) let savings grow tax-free. Union members may also have the Canadian Entertainment Industry Retirement Plan or other plans funded by employer contributions, and the CPP provides a basic pension based on contributions.

Small, regular contributions in busy months add up over a long career, and an accountant or financial planner can help choose the right accounts.

Choosing an accountant

An accountant who knows the film industry understands mixed payroll and self-employment income, kit rentals, union dues, per diems and the equipment rules that apply to camera crew. Ask colleagues for recommendations, ask the accountant about their experience with film crew and agree on fees in advance. Bring organized records: an accountant can do much more with a tidy spreadsheet and receipts than with a shoebox of papers, and the time saved often pays for part of the fee.

When work stops

Strikes, pandemics, slowdowns and personal events can stop work for months. Crew who survive these periods usually have savings, low fixed costs and more than one source of income, such as corporate work, rental house shifts, teaching or other skills. Check what support is available: employment insurance or unemployment benefits for payroll workers, union hardship funds and industry charities. Plan before a crisis, not during it.

Equipment depreciation and replacement

Camera equipment loses value as it ages and as new technology arrives. Tax rules allow the cost of equipment to be deducted over several years, through capital cost allowance in Canada or depreciation and expensing rules in the US, when it is used to earn business income. Beyond taxes, plan for replacement: set aside part of kit rental income each year so that a worn or outdated item can be replaced without borrowing. Buying used equipment from reputable sellers can reduce costs, but check its condition and history carefully.

Credit, loans and big purchases

Specialty operators sometimes borrow to buy expensive rigs such as stabilizers or remote heads. Before borrowing, estimate realistic rental demand, the payback period and the risk that the equipment becomes outdated or that work slows. Lenders may ask for two or more years of tax returns from freelancers, which is another reason to keep good records and report all income. A large loan payment can turn a slow month into a crisis, so keep a larger buffer when carrying debt.

Common tax mistakes to avoid

• Not reporting kit rental or cash payments, which tax authorities can trace through production records.
• Claiming personal expenses as business expenses, such as everyday clothing or family travel.
• Missing instalment or estimated tax payments, which leads to interest and penalties.
• Losing receipts and records needed to support deductions.
• Forgetting provincial or state tax rules, especially after working in more than one province or state in a year.
• Waiting until the filing deadline to organize a year of records.

Working across borders

Camera crew who work in both Canada and the US, or in several provinces or states, face extra tax complexity. Income earned in another country may be taxed there and at home, with treaty rules and foreign tax credits to prevent double taxation, and work permits are required. US states and Canadian provinces may also tax income earned within them. Keep detailed records of where each day was worked and get advice from an accountant familiar with cross-border film work.

Employment insurance for freelancers in Canada

Crew paid through payroll as employees pay EI premiums and may qualify for regular EI benefits between jobs if they have enough insurable hours in their qualifying period, a requirement that varies with the regional unemployment rate. Self-employed income does not count toward regular benefits, but self-employed people can register for EI special benefits, such as maternity, parental and sickness benefits, by paying premiums on their self-employment earnings. Keep records of employment from every payroll job, because they are used to calculate insurable hours.