You have to pay CRA tax instalments if your net tax owing is more than $3,000 this year AND it was also more than $3,000 in either of the last two years ($1,800 if you live in Quebec). Instalments are due March 15, June 15, September 15 and December 15. If you pay late or too little, the CRA charges interest (7% for Q4 2026), compounded daily.
Got a letter from the CRA called an “Instalment Reminder” and not sure what to do with it? Or you’re self-employed, you owed a big chunk at tax time, and someone told you “you’ll be on instalments now”? Let’s clear it up.
On this page
- Do You Have to Pay Tax Instalments? The $3,000 Rule Explained
- 2026 Instalment Due Dates
- How Much to Pay: The Three CRA Calculation Options
- Instalment Interest and Penalties: What Late or Short Payments Cost
- How to Pay Your Instalments to the CRA
- Can You Stop or Reduce Your Instalments?
- FAQ: CRA Tax Instalments
- Get Your Instalments Calculated Before December 15
Do You Have to Pay Tax Instalments? The $3,000 Rule Explained
Instalments are the CRA’s way of making you pay tax during the year instead of in one big lump in April. Employees already do this through payroll deductions. If you earn money with no tax taken off, the CRA wants its share up front.
You must pay instalments for 2026 if both of these are true:
| Test | Rule (outside Quebec) | Rule (Quebec residents) |
| This year | Net tax owing in 2026 will be more than $3,000 | More than $1,800 |
| Previous years | Net tax owing was more than $3,000 in 2025 or 2024 | More than $1,800 |
“Net tax owing” means the balance you’d owe when you file, after the tax already withheld at source (from your T4, pension, etc.) is subtracted.
Who usually ends up on instalments:
- Self-employed people, freelancers and contractors (nobody withholds tax on your invoices)
- Landlords with rental income
- Investors with dividends, interest or capital gains
- Retirees whose pension, CPP or OAS doesn’t have enough tax withheld
- People with two jobs, where each employer withholds as if it’s your only job
Good to know: No reminder from the CRA doesn’t mean you’re off the hook. If you meet the two-part test, you’re required to pay, reminder or not.
2026 Instalment Due Dates
| Instalment | Due date |
| 1st | March 15, 2026 |
| 2nd | June 15, 2026 |
| 3rd | September 15, 2026 |
| 4th | December 15, 2026 |
If the due date lands on a weekend or holiday, your payment is on time if the CRA receives it the next business day.
Farmers and fishers are different: if most of your income comes from farming or fishing, you make one instalment, due December 31.
How Much to Pay: The Three CRA Calculation Options
You get to choose how you calculate your instalments. You don’t need to tell the CRA which option you used. You just pay.
| Option | How it works | Best for |
| 1. No-calculation (reminder) option | Pay exactly what the CRA shows on your Instalment Reminder. March and June are based on your 2024 tax, September and December “top up” to your 2025 tax. | Most people. If you pay these amounts on time, the CRA won’t charge instalment interest, even if you end up owing more. |
| 2. Prior-year option | Take your 2025 net tax owing and divide by four. | People whose income is steady year to year. |
| 3. Current-year option | Estimate your 2026 net tax owing and divide by four. | People whose income dropped this year. Risky: if you underestimate, you pay interest. |
Example: Sara is a self-employed designer. Her net tax owing was $9,200 in 2025. Under the prior-year option she pays $2,300 each quarter. Her 2026 income is way down, though, and she expects to owe about $4,000, so she switches to the current-year option and pays $1,000 a quarter. If she’s right, she keeps $5,200 of cash in her business. If she’s wrong, she pays interest on the shortfall.
Our take: If you’re not sure, use the reminder amounts. It’s the only option that fully protects you from instalment interest.
Instalment Interest and Penalties: What Late or Short Payments Cost
Instalment interest
- Charged if you pay late or pay less than you should have under the option that gives you the lowest total.
- The rate is the CRA’s prescribed rate plus 4%. For October to December 2026 it’s 7%, compounded daily.
- It’s charged from each missed due date until you pay or until your balance-due day (April 30).
Instalment penalty
On top of interest, there’s a penalty if your instalment interest for the year is more than $1,000. The penalty is 50% of the amount by which your interest is over the greater of:
- $1,000, or
- 25% of the interest you would have owed if you’d paid no instalments at all.
The “catch-up” trick: The CRA calculates interest both ways, so you can earn credit by paying early or overpaying. If you missed the March and June payments, paying extra in September or December can offset some or all of the interest you’ve already built up.
| Situation | What happens |
| Paid reminder amounts on time | No instalment interest, even if you owe more in April |
| Paid late | Interest from the due date to the payment date |
| Never paid | Interest on every missed instalment, plus a possible penalty |
| Paid more than needed | Excess is applied to your tax; no interest is paid back to you on overpaid instalments |
How to Pay Your Instalments to the CRA
- Online banking: Add the payee “CRA (Revenue) – Tax Instalment” (the name varies by bank). Your account number is your SIN.
- CRA My Payment: Pay with Visa Debit, Debit Mastercard or Interac Online.
- Pre-authorized debit: Set it up in CRA My Account and forget about it. This is the easiest way to never miss one.
- Credit card: Only through third-party processors, and they charge a fee.
- At your bank: Use the remittance voucher that came with your reminder.
When you file your return, your instalments show up on line 47600 and reduce what you owe.
Can You Stop or Reduce Your Instalments?
Yes, in a few cases:
- Your income dropped: Use the current-year option and pay less. Just make sure your estimate is realistic.
- You now have enough tax withheld: Ask your employer to deduct extra tax from each pay (the “additional tax” line on your TD1), or ask your pension payer, CPP or OAS to withhold more. If your 2026 net tax owing drops to $3,000 or less, you don’t need to pay instalments, even if you get a reminder.
- You got an RRSP or other big deduction: Ask the CRA to reduce withholding at source with form T1213, or simply lower your current-year estimate.
Once you’re under the $3,000 threshold for a year, the reminders stop on their own after the CRA processes your returns.
FAQ: CRA Tax Instalments
Do I have to pay instalments in my first year of self-employment?
Usually not. You need net tax owing above $3,000 in the current year and in one of the two previous years. In your first year you normally won’t have that history, but you’ll still owe the full balance on April 30, so set money aside.
What if I get a reminder but I don’t think I need to pay?
If your 2026 net tax owing will be $3,000 or less, you don’t have to pay. If you’re wrong, though, interest applies from each due date.
Do corporations pay instalments too?
Yes, but the rules are different. Corporations generally pay monthly. Small CCPCs that qualify can pay quarterly. Corporate instalments are due if the corporation’s tax payable is more than $3,000 in the current or previous year.
Are instalment payments tax deductible?
No. Instalments are just prepayments of your income tax. Interest and penalties the CRA charges on them aren’t deductible either.
Can I pay all four instalments at once?
Yes. Paying early is fine and can offset interest from any earlier missed payments.
What happens if my instalments were more than my tax?
You get the difference back as a refund when you file.
