CRA Instalment Interest & Penalty Calculator
Check whether the $1,000 interest threshold is crossed and apply CRA's two-part formula.
Use the actual instalment-interest estimate and the interest that would apply if no 2026 instalments had been paid. CRA uses both figures in its penalty formula.
Estimated instalment penalty
$750Interest exceeds the $1,000 threshold
Formula deduction
$1,000Higher of $1,000 or 25% of no-payment interest
Interest + penalty
$3,250Frequently asked questions
When does the CRA instalment penalty apply in 2026?
CRA applies the instalment penalty only when the actual 2026 instalment interest charge is more than $1,000.
How does CRA calculate the instalment penalty?
CRA subtracts the higher of $1,000 or 25% of the interest that would apply if no instalments were paid from actual instalment interest, then divides the remaining amount by two.
Official source
See the full CRA prescribed interest rates reference page for the quarterly history and how the rate is set.
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