Quarterly Tax Instalments — Do You Need to Pay CRA in Advance?

The $3,000 threshold

The CRA requires instalment payments once your net tax owing exceeds $3,000 in the current year and in one of the two preceding years ($1,800 if you're a Quebec resident, since provincial tax there is collected separately). If you're self-employed with no tax withheld at source, your entire tax bill counts toward this threshold — there's no employer withholding to offset it, unlike a salaried employee. See our self-employment tax basics guide for how that tax bill is calculated in the first place.

Due dates

Instalments are due four times a year:

• March 15
• June 15
• September 15
• December 15

The CRA sends instalment reminders to people who qualify, but receiving (or not receiving) a reminder doesn't change the legal obligation — if you cross the threshold, you owe instalments whether or not CRA reminds you.

What happens if you miss one

CRA charges instalment interest on late or insufficient payments, at the prescribed rate plus 2%, compounding daily. A separate penalty may also apply, but only if that instalment interest works out to more than $1,000 for the year. This can add up quickly on a large balance, so it's worth estimating your instalments proactively rather than waiting for a shortfall to surface at filing time.

Since your instalment amounts are based on your expected tax owing, running your numbers through a tax estimator as your income changes through the year makes it much easier to set aside the right amount before each due date, instead of guessing.