Do I have to pay CRA tax instalments? Thresholds, due dates and interest
A self-employed person in BC must pay quarterly instalments if their net tax owing is more than $3,000 in the current year and in either of the two previous years. Instalments are due March 15, June 15, September 15 and December 15. A corporation pays instalments if its tax is more than $3,000 in the current or previous year: monthly, on the last day of each month, or quarterly if it qualifies as a small Canadian-controlled private corporation. Late or short instalments cost interest at 7% for October to December 2026, compounded daily.
Updated October 27, 2026. Figures from the CRA pages linked below.
Individuals and sole proprietors
- Threshold: net tax owing over $3,000 ($1,800 in Quebec) in 2026 and in either 2025 or 2024 (CRA: who has to pay instalments, modified January 20, 2026).
- Due dates: March 15, June 15, September 15, December 15.
- Three ways to calculate: the no-calculation option (pay the amounts on the CRA reminder), the prior-year option, or the current-year option (your own estimate). Pay the reminder amounts on time and the CRA will not charge instalment interest, even if you owe more when you file.
- Net tax owing includes CPP contributions on self-employment income, which surprises many new sole proprietors.
Corporations
- Threshold: tax of more than $3,000 for the current or previous year. New corporations generally start in their second year.
- Monthly: due the last day of each month of the tax year.
- Quarterly: allowed for a small CCPC that claimed the small business deduction, has taxable income (with associated companies) of $500,000 or less, taxable capital of $10 million or less, and a perfect compliance record for 12 months. For a December 31 year end: March 31, June 30, September 30, December 31.
- Methods: current-year estimate, previous year's tax, or a mix of the two prior years. Pick the lowest (CRA: corporation instalment guide).
Worked example: a Vernon electrician
He owed $9,000 on his 2025 return and $6,500 for 2024, and expects about the same for 2026. He is over $3,000 in 2026 and in 2025, so instalments apply. On the prior-year basis: $9,000 / 4 = $2,250 each quarter.
Skip the September 15 and December 15 payments and he owes $4,500 that should have been paid. Interest at 7% compounded daily on $2,250 from September 15 and $2,250 from December 15 to April 30 runs to about $160, assuming the 7% rate holds (it is reset each quarter). Small, but it is not deductible, and once instalment interest passes $1,000 a penalty adds half of the excess over the greater of $1,000 or 25% of the interest that would have applied with no payments at all.
Already late on a return as well? See CRA late filing penalty and interest.
FAQ
I got a reminder but my income dropped. Do I have to pay?
No. If your 2026 net tax owing will be $3,000 or less, instalments are not required, even with a reminder. If your estimate is wrong, interest applies.
Can I catch up a missed instalment?
Yes. Paying early or overpaying a later instalment offsets interest on an earlier late one.
Is instalment interest deductible?
No.
Do instalments apply to GST?
Annual GST filers whose net tax is $3,000 or more also pay quarterly GST instalments. That is a separate rule.
If you just went self-employed or incorporated, talk to your accountant about which instalment option fits your cash flow.