Tax instalments
Do you have to pay tax instalments?
Instalments aren't a bill you were sent — they're a test you either meet or don't. Top $3,000 of net tax owing this year and in either of the two years before, and the CRA wants four payments instead of one.
Most instalment calculators divide last year's tax by four and stop there. That skips the question that decides everything: whether you owe instalments at all. It turns on your net tax owing — total tax minus what was already withheld at source — not on what you earn, which is why a $200,000 salary with full payroll withholding can owe nothing while a $60,000 retiree drawing an un-withheld RRIF gets a reminder. Work through the three steps below.
1. Do you have to pay?
Net tax owing is your total tax for the year minus what was withheld at source. Enter it for three years — instalments are required only when it tops the threshold this year and in either of the two years before.
Your 2026 total tax minus tax withheld at source.
2025 total tax minus tax withheld — before crediting instalments you already paid.
2024. This is what sets the March and June no-calculation amounts.
Don't know your net tax owing? Estimate it from your income
A starting estimate from your income sources. Self-employment income adds both halves of CPP, which count toward the instalment threshold; income with no withholding is what usually pushes people over it.
After expenses. Attracts both halves of CPP.
Income that had tax withheld at source.
From your pay, pension or RRIF withdrawals.
Interest, rent, taxable capital gains, dividends.
Estimated net tax owing: $27,754
Income tax $18,462 + self-employed CPP $9,292 − tax withheld $0.
Yes — instalments are required
Your net tax owing tops $3,000 this year and in at least one of the two years before, so both halves of the test are met.
To get out of instalments entirely, have $9,000 more tax withheld at source this year — on your RRIF, pension or pay.
2. What would you pay?
The CRA lets you calculate instalments three ways. You choose, you can switch between them, and you never have to say which you used.
| Option | March 16 | June 15 | September 15 | December 15 | Year total |
|---|---|---|---|---|---|
| No-calculationThe amounts on the CRA's reminders. No interest risk. | $2,000 | $2,000 | $4,000 | $4,000 | $12,000 |
| Prior-yearLast year's net tax owing, split four ways. | $3,000 | $3,000 | $3,000 | $3,000 | $12,000 |
| Current-yearYour own estimate for this year, split four ways. | $3,000 | $3,000 | $3,000 | $3,000 | $12,000 |
Recommended: No-calculation. Your income isn't falling, so there's nothing to gain by paying less than the reminders ask — and the reminder amounts are the only ones that can never cost you interest.
Pay the no-calculation amounts in full and on time and you owe no instalment interest, even if they turn out to be too low. The other two options ease cash flow but carry the estimate risk.
3. What does missing one cost?
Instalment interest runs at the prescribed rate on overdue amounts, compounded daily from the day after the due date to your balance-due date the following April 30.
The whole instalment, or just the part you were short.
Interest stops the day the payment lands.
Compounded daily over 227 days, to the April 30 balance-due date.
The CRA nets it out: paying an instalment early or overpaying one earns credit interest that cancels interest on a payment you shorted. That credit only offsets instalment interest in the same year — it is never refunded to you.
Interest uses the prescribed rate on overdue amounts — 7% through 2026 so far — compounded daily. The rate resets every calendar quarter; quarters the CRA hasn't announced yet carry the latest known rate forward. Verified against canada.ca on 2026-08-10.
Instalment questions, answered
Who has to pay tax instalments to the CRA?
You have to pay instalments when your net tax owing is more than $3,000 ($1,800 if you were a resident of Quebec on December 31) in the current year AND in either of the two preceding years. Net tax owing is your total tax for the year minus the amounts withheld at source, plus self-employed CPP contributions and any voluntary EI premiums. Because the test is about tax owing rather than income, a high earner with full payroll withholding may owe nothing, while a retiree with un-withheld RRIF and investment income may owe instalments.
What are the 2026 tax instalment due dates?
March 15, June 15, September 15 and December 15, moved to the next business day when they fall on a weekend or holiday. March 15, 2026 falls on a Sunday, so the first 2026 instalment is due March 16, 2026. Farmers and fishers instead make a single instalment by December 31.
What happens if I skip an instalment payment?
The CRA charges instalment interest at the prescribed rate on overdue amounts — 7% through 2026 so far — compounded daily from the day after the due date to your balance-due date the following April 30. Skipping one $4,000 September instalment costs about $178. Interest of $25 or less isn't charged. There is also an instalment penalty, but only once instalment interest passes $1,000: half of whatever the interest exceeds the greater of $1,000 and 25% of the interest you would have owed had you paid nothing at all.
Which of the three instalment options should I choose?
The no-calculation option — the amounts printed on the CRA's February and August reminders — is the only one that guarantees no instalment interest, even if those amounts turn out to be too low. The prior-year and current-year options can be lower, but if your estimate comes in under what you actually owe, the CRA charges interest back to each due date. Use the no-calculation amounts unless this year's tax will be clearly and reliably lower.
How do I stop having to pay instalments?
Increase the tax withheld at source. Instalments are only required when net tax owing tops the threshold, so asking your RRIF issuer, pension payer or employer to withhold more tax reduces what is left owing at filing time. Get net tax owing to $3,000 or less ($1,800 in Quebec) and the requirement goes away.
Do Quebec residents pay instalments differently?
Yes, twice over. Quebec residents are measured against a lower $1,800 CRA threshold, and they also owe a separate parallel instalment to Revenu Québec on the same four dates. Revenu Québec charges an additional 10% per year, compounded daily, on top of its regular interest whenever a payment comes in under 75% of what was due.
Estimate for education, not tax advice. The income estimator applies ordinary tax brackets and the basic personal amount only — no dividend gross-up, capital-gains inclusion rate, deductions or other credits — so treat its net tax owing as a starting point, not a return. Farmers and fishers follow a different single-instalment rule. The amounts on your CRA reminders are the authority on the no-calculation option.
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