CRA Tax Instalments in Canada
If little or no tax comes off your income at source, the CRA may ask you to prepay it in four quarterly instalments. Here is who has to pay, when, how much and what happens if you skip one.
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Do I need to pay tax instalments?
You need to pay CRA tax instalments if your net tax owing is more than $3,000 in the current year and was also more than $3,000 in either of the two previous years. For Quebec residents the threshold is $1,800. Instalments are due on 15 March, 15 June, 15 September and 15 December.
What are CRA tax instalments?
CRA tax instalments are payments you make during the year toward the income tax you expect to owe, instead of paying it all when you file. They exist because employers withhold tax from each paycheque, but nobody withholds tax from self-employment, rental, investment or some pension income.
The instalment system asks those taxpayers to pay as they go. It is not an extra tax. Every instalment is credited against the balance on your return, and any overpayment comes back as a refund.
Most people who pay quarterly tax payments in Canada are freelancers, sole proprietors, landlords, retirees with large RRIF or pension income, and investors with significant capital gains or dividends. If that sounds like you, read our guide to self-employed taxes in Canada alongside this one.
Who has to pay quarterly tax payments in Canada?
You must pay instalments when your net tax owing is more than $3,000 in the current year and was more than $3,000 in 2024 or 2025. Net tax owing is your combined federal and provincial tax, minus non-refundable credits and minus any tax already withheld at source. Quebec residents use $1,800, because Quebec collects its own provincial tax.
Both conditions matter. A single year with a large balance owing, such as the year you start freelancing, will not trigger instalments on its own. The CRA looks for a pattern across years.
- Salaried employees rarely pay instalments, because payroll deductions cover their tax.
- New freelancers often get their first instalment reminder in the second or third year, once two years of balances owing are on file.
- Retirees can avoid instalments by asking for tax to be withheld from CPP, OAS or RRIF payments.
- Farmers and fishers follow a different rule: one instalment due on 31 December.
Tax instalment due dates for 2026
Instalments are due on the 15th of March, June, September and December. When a due date falls on a weekend or public holiday, the CRA treats a payment as on time if it arrives by the next business day. The balance for the year is then due by 30 April 2027 with your return. Our tax filing deadline guide covers the return and balance-owing dates.
| Instalment | Due date | Note |
|---|---|---|
| First | Sunday 15 March 2026 | On time if received Monday 16 March |
| Second | Monday 15 June 2026 | Also the filing deadline for self-employed people |
| Third | Tuesday 15 September 2026 | Business day |
| Fourth | Tuesday 15 December 2026 | Business day |
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How much should each instalment be?
The CRA accepts three ways to work out your payments. You can switch options from year to year. If you pay the amounts on your CRA reminder in full and on time, you will not be charged instalment interest, even if you owe more when you file.
| Option | How it works | Best for |
|---|---|---|
| No-calculation | Pay the amounts printed on the CRA reminders sent in February and August | Most people; it guarantees no instalment interest |
| Prior-year | Divide last year's net tax owing by four and pay that each quarter | Income that is steady or rising slowly |
| Current-year | Estimate this year's net tax owing and divide by four | Income that has clearly dropped this year |
The current-year option carries the most risk. If you estimate too low, the CRA charges interest on the shortfall. Use our income tax calculator for Canada to estimate the year's tax, then compare it with your reminder before choosing.
What happens if you pay late or not at all?
If you pay late or pay less than your chosen option requires, the CRA charges instalment interest. It is calculated at the prescribed rate for overdue taxes, which the CRA sets every quarter, and it compounds daily from each missed due date.
If your instalment interest for the year is more than $1,000, a penalty can apply on top. You can reduce or cancel instalment interest by paying the next instalment early or paying more than required, because the CRA credits interest on early and extra payments against interest on late ones.
- Check the reminder in My Account or your mail each February and August.
- Pay through online banking (choose the current-year instalment payee), My Account, or pre-authorized debit.
- Keep the confirmation number for each payment.
- Compare total instalments with your balance when you file, and adjust next year's amounts.
How to budget for tax instalments
The hard part of quarterly tax payments is not the maths. It is having the cash on the 15th. The simplest fix is to move a fixed share of every client payment into a separate tax savings account the day it arrives.
Many freelancers set aside 25% to 30% of each payment, then adjust once they know their bracket from Canada's 2026 tax brackets. If you also charge GST/HST, keep that money separate too, because it belongs to the CRA.
- Make it a bill. Add each instalment as a recurring bill in EMOH Pay so a reminder lands before the due date.
- Use a savings goal. Set a tax savings goal equal to your annual instalments and watch it fill between due dates.
- Smooth uneven income. Our guide to budgeting with irregular income shows how to pay yourself a steady salary from lumpy client payments.
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Get started free➜CRA Tax Instalments in Canada: frequently asked questions
What is net tax owing for instalment purposes?
It is your total federal and provincial income tax, minus non-refundable tax credits and any tax already withheld at source. The instalment amounts on your reminder also cover CPP contributions on self-employment income, so budget for those too.
Do I have to pay if I get an instalment reminder?
Not always. The reminder means the CRA thinks you may need to pay. If your income has fallen and you expect to owe $3,000 or less this year, you can skip payments, but you risk instalment interest if your estimate turns out low.
Can I pay my tax instalments monthly?
Yes. You can pay more often than quarterly, for example by pre-authorized debit each month. What matters is that the total paid by each quarterly due date meets your chosen option.
Are tax instalments the same as paying my balance owing?
No. Instalments are prepayments toward the current year. Your balance owing for the previous year is a separate payment due by 30 April. Use the correct payee in online banking so each payment lands in the right year.
How can EMOH Pay help with quarterly tax payments?
EMOH Pay can track each instalment as a bill with a reminder, hold a tax savings goal, and separate the GST/HST portion of business expenses. It is free to start on iPhone, Android and the web.
Sources and further reading
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