CRA Quarterly Tax Instalments Calculator

CRA requires instalments if your net tax owing exceeds $3,000 ($1,800 for Quebec residents) in the current year AND in either of the two previous years. Both conditions must be met under ITA s.156.1. The rule applies to individuals — corporations have a separate instalment regime under ITA Part I. If you fail the first condition in any year, the requirement lifts for that year even if prior years exceeded the threshold.

The no-calculation method (the CRA reminder amount on Form INNS1) is the only method that guarantees zero interest charges regardless of your actual current-year tax. Choose the prior-year option if your income dropped vs. two years ago. Choose the current-year option only if you have a confident estimate that's materially lower than the reminder — be conservative, because under-estimating triggers interest on the shortfall.

CRA charges instalment interest at the prescribed overdue rate (7% annually for Q2 2026, set quarterly), compounded daily from each missed due date until payment. The interest is calculated on each missed instalment separately. If the total instalment interest for the year exceeds $1,000, an additional 50% penalty applies on the excess under ITA s.163.1. Both interest and the s.163.1 penalty are non-deductible from business or rental income.

March 15, June 15, September 15, and December 15. If a due date falls on a weekend or statutory holiday, the payment is considered on time if received by CRA the next business day. Postmarked-by-due-date counts as on time for mailed cheques, but CRA recommends electronic payment for instalments above $10,000 (mandatory for amounts above $10K under recent CRA policy).

Yes — and you should, because larger later payments earn 'overpayment interest' that offsets some of the underpayment interest. Specifically, CRA calculates instalment interest by computing what you would owe under the no-calculation method (the benchmark), comparing to your actual schedule, and netting overpayments against underpayments. So a $5,000 over-payment at Q3 offsets a $5,000 under-payment from Q1 — but only the interest, not the penalty. If you missed Q2, paying double at Q3 reduces the net interest cost substantially.

Yes. The federal threshold for Quebec residents is $1,800 (not $3,000) because Revenu Québec administers Quebec provincial tax separately. The combined federal + Quebec instalment requirement still uses dual administration — you may receive separate reminder notices from CRA (federal) and RQ (Quebec provincial). Each agency calculates its own threshold independently. For most Quebec self-employed individuals, both federal and provincial instalments are required.

Four options: (1) CRA My Account — direct debit from bank account, preferred for most individuals; (2) Online banking — add 'CRA REVENUE — TAX INSTALMENT' as a payee using your SIN as account number; (3) Pre-authorized debit set up via My Account, useful for recurring schedules; (4) Cheque or money order mailed to the Sudbury Tax Centre with a remittance voucher (Form INNS3). For amounts ≥ $10,000, CRA effectively requires electronic payment. Wire transfer is also available for amounts > $25,000.

Usually no. The instalment requirement needs both current-year net tax owing AND prior-year (or two-years-prior) net tax owing to exceed $3,000. In your first year of self-employment, your prior-year tax owing was likely zero (or below threshold from employment-only income), so the prior-year condition fails — even if your current-year tax owing will be substantial. You pay the full first-year liability on April 30 (or June 15 for self-employed filers) without instalments. The second year is when instalments typically kick in.

Switch to the current-year option and pay 1/4 of your estimated current-year tax each quarter. CRA cannot charge interest if your current-year actual tax owing turns out to be at or below your estimate. The risk is under-estimating — if actual exceeds estimate, interest accrues on the shortfall from each missed due date. A reasonable buffer is 10-15% above your best estimate. Track YTD income and adjust your remaining instalments mid-year if your projection changes.

Instalments themselves are not deductible — they're prepayments of your annual income tax liability. The tax you ultimately pay (after netting instalments at year-end) is reported on your T1 return as your income tax for the year. Instalment interest and the s.163.1 penalty are similarly non-deductible from business or rental income — they're personal tax administrative costs. This is different from CRA interest on a balance owing after your T1 assessment, which is also non-deductible.