CRA Quarterly Tax Instalments Calculator
Find out if CRA requires you to pay quarterly instalments, compare all three permitted methods, and see the interest + penalty cost if you skip your payments.
Net Tax Owing — Three-Year History
CRA requires instalments if your net tax owing exceeds the threshold this year AND in either of the two prior years. Use Line 43500 from your T1 returns (federal + provincial combined for non-Quebec residents).
Instalments Required
Required: current-year tax exceeds $3,000 and prior year also exceeded it.
Threshold for ON: $3,000 net tax owing.
Compare the Three CRA-Permitted Methods
| Method | Mar 15 | Jun 15 | Sep 15 | Dec 15 | Annual Total |
|---|---|---|---|---|---|
| No-Calculation (CRA Reminder)Recommended | $2,500 | $2,500 | $3,500 | $3,500 | $12,000 |
| Prior-Year Option | $3,000 | $3,000 | $3,000 | $3,000 | $12,000 |
| Current-Year Option | $3,750 | $3,750 | $3,750 | $3,750 | $15,000 |
No-Calculation (CRA Reminder): Pay the amount CRA writes on your instalment reminder (Form INNS1). No penalty risk if you pay this exactly and on time.
Prior-Year Option: Pay 1/4 of your prior-year net tax owing each quarter. Safe-harbour: no interest if prior-year tax is accurate.
Current-Year Option: Pay 1/4 of your estimated current-year tax. Lowest cashflow if income dropped, but interest applies if you under-estimate.
If You Skip All Four Payments
Instalment Interest
$426
s.163.1 Penalty
$0
Total Extra Cost
$426
Assumes 7% annual overdue prescribed rate (Q2 2026) compounded daily on the prior-year-method amounts. Penalty applies only when interest exceeds $1,000 per ITA s.163.1.
How it works: CRA's "no-calculation" reminder amount uses your two-years-prior tax for Q1+Q2 and prior year for Q3+Q4. The prior-year option splits prior year's tax evenly; current-year splits your estimate evenly. Paying the no-calc amount on time always avoids interest, even if your current-year tax turns out higher.
How CRA's Three Instalment Methods Work
No-calculation option: CRA mails you an instalment reminder (Form INNS1) twice a year with the exact dollar amounts to pay. The first two payments are 1/4 of your two-years-prior net tax owing each; the last two payments are split to make the year total equal your prior-year tax. Paying these exact amounts on time guarantees no interest charges — even if your actual current-year tax is higher.
Prior-year option: You divide your prior-year net tax owing by four and pay 1/4 each quarter. CRA cannot charge instalment interest if your prior-year amount is accurate, regardless of how your current year turns out.
Current-year option: You estimate your current-year tax and pay 1/4 of that estimate each quarter. This is the lowest cashflow if your income has dropped, but you'll be charged interest if you under-estimate.
Quebec residents: The federal threshold is $1,800 (not $3,000) because Revenu Québec administers Quebec provincial tax separately, splitting the combined liability roughly in half.
Sources
Last updated May 2026. Reflects 2026 tax year rules and Q2 2026 prescribed overdue rate of 7%.
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