Understanding the ins and outs of Canada Revenue Agency instalment payments

After filing your annual tax return in Canada, typically, one of two things will happen. Either the Canada Revenue Agency (CRA) will issue you a refund, which occurs if you paid more income tax than you needed to throughout the previous tax year. Or, if you didn’t pay enough income tax during the prior tax period, you will owe money to the CRA.

While the majority of Canadians understand these two common outcomes of filing their income taxes, there is still some confusion around additional requirements that can occur like the CRA tax instalments.

So, with tax season just around the corner, we decided to answer 7 common questions that we often hear from clients regarding these instalment payments.

Read on to learn more about what CRA instalments are, how they’re calculated, and why you may be required to pay them.

7 frequently asked questions about CRA tax instalments

1) What are CRA instalments?

CRA instalments are prepayments that you make towards the current tax period.

For example, if you owed the CRA $4,000 based on your 2025 tax return, the Canada Revenue Agency would require you to make instalment prepayments totaling $4,000 throughout 2026 in anticipation of you owing a similar amount on your 2026 return when you file in 2027.

2) What do instalments go towards?

The CRA requires instalment prepayments for various types of taxes, such as:

• Corporate taxes
• Personal taxes
• Goods and Services Tax (GST)
• And more (this list is not exclusive!)

3) When are CRA instalments due?

For personal income tax instalments, you need to pay quarterly by the 15th of March, June, September, and December. However, the deadline for other instalment payments, such as corporate and GST, varies depending on the tax account and fiscal year.

We recommend getting in touch with your accountant if you’re unsure of when your instalment deadlines are.

4) What triggers instalment payments?

If you have a tax balance owing of $3,000 or more for the prior tax year, and you are a Canadian resident in any province or territory other than Quebec, you will need to pay instalments for the current tax period.

It's important to note that the threshold is much lower in Quebec, where a net tax owing of more than $1,800 will result in the CRA requiring you to make instalment prepayments.

5) How does the CRA calculate instalments?

Typically, you can expect instalments to equal your total tax balance from the previous tax year. The CRA requires various payment frequencies based on different situations, so it's always a good idea to confirm the amount owing with your accountant.

6) Do I have to pay the instalments?

The short answer is yes. If you do not pay the instalments on time in full, the CRA will likely charge you instalment interest. You can visit the CRA website to learn more about how instalment interest is calculated.

That said, you can always do a cost-benefit analysis. Through this exercise you may determine that forgoing the instalment payments and paying the interest makes more sense for your situation.

7) Will I owe interest if I’m late or miss a payment? 

Yes, you will likely have to pay instalment interest, but you can reduce or eliminate interest if you do one of the following:

• Overpay your next instalment
• Pay your next instalment early

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By Carly Boyce

Carly Boyce, CPA, BBA, is one of Loren Nancke’s Senior Accountants. In her role at the firm, Carly works with the team to complete a wide range of accounting services.

Learn more about Carly and the rest of our team.