The CRA requires quarterly tax instalments if you owe more than $3,000 in two consecutive years. Due dates, calculation methods, and penalty rules explained.
Most employed Canadians have taxes withheld at source and never need to worry about quarterly tax instalments. But if you're self-employed, earn significant investment income, receive pension or rental income without adequate withholding, or recently retired, you may be required to pay the CRA in quarterly instalments throughout the year rather than one lump sum at filing time. Here's everything you need to know about the 2026 instalment system.
Tax instalments are advance payments of your estimated current-year taxes. Instead of waiting until April 30 to pay everything owing, the CRA requires certain taxpayers to make four payments throughout the year. This mirrors how employees pay taxes — through payroll deductions on every paycheque — ensuring the government receives tax revenue consistently throughout the year rather than in one annual payment.
You are required to pay quarterly tax instalments if your net tax owing exceeds $3,000 (or $1,800 for Quebec residents, since Revenu Québec collects provincial tax separately) in both the current year and either of the two previous years.
Common situations requiring instalments:
Note: These deadlines are for the 2026 tax year (income earned Jan–Dec 2026). Instalments for the 2025 tax year were due in March, June, September, and December 2025. Your April 30, 2026 filing deadline reconciles any difference between instalments paid and actual 2025 taxes owing.
The simplest approach: pay exactly the amounts shown on the CRA's instalment reminders (the pink "instalment reminder" notices mailed to you, or visible in CRA My Account). These are calculated by the CRA based on your prior two years' returns and are guaranteed to result in no instalment interest if paid on time — even if you end up owing more at filing time.
Instalment reminder amounts for 2026 are typically based on your 2024 tax owing ÷ 4 for the first two payments, then adjusted based on your 2025 NOA for the last two payments.
Pay 25% of your previous year's (2025) net taxes owing, multiplied by four instalments. This works well if your income is similar to last year. Formula: (Prior year net tax) ÷ 4 per quarter. This method also protects you from instalment interest as long as you base it on the prior year's actual tax, paid on time.
Estimate your current year (2026) total tax liability and pay 25% per quarter. This is the most accurate method if your income has changed significantly — either up or down. If you underestimate and your actual tax exceeds the amount paid, instalment interest applies to the shortfall. If you overestimate, you'll receive a refund at filing.
If you fail to pay instalments on time or underpay, the CRA charges instalment interest at the prescribed rate (currently 9% annually in 2026, compounded daily). Interest is calculated from the due date of each instalment to the earlier of: the date you pay, or April 30.
An instalment penalty (separate from interest) applies when your instalment interest exceeds $1,000. The penalty is 50% of the lesser of: the instalment interest charged, or the instalment interest that would have been charged if you had made no payments. This penalty is in addition to the interest charges.
The good news: if you overpaid in some quarters and underpaid in others, the CRA offsets the interest owing against any instalment credit (interest offset).
Enter your prior year net taxes and estimated current year taxes to see recommended instalments.
You can make instalment payments the same way you pay any CRA amount:
Farmers and fishers have a special instalment rule: instead of four quarterly payments, they make a single instalment payment due December 31 of the tax year, equal to two-thirds of their estimated current-year taxes or their prior-year taxes (whichever is lower). The remaining balance is due at the April 30 filing deadline.
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