If you file GST/HST annually and your net tax was $3,000 or more last fiscal year, you generally have to make quarterly GST/HST instalment payments to the Canada Revenue Agency this year. Each payment is due within one month after the end of a fiscal quarter, and each one should equal roughly one-quarter of what you’ll owe for the year. Miss a deadline or underpay, and the CRA charges daily compounding interest at the prescribed rate on the shortfall.
Who Has to Pay Instalments
The rule catches annual filers whose net tax hit $3,000 or more in the previous fiscal year. Below that figure, the Excise Tax Act treats your instalment base as zero, so you simply pay the balance when you file your annual return.1Justice Laws Website. Excise Tax Act – Section 237 The CRA also looks at the current year: if both the prior year and the current year come in under $3,000, no instalments are required.2Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – Find Out if You Need to Pay
Monthly and quarterly filers are outside this system. Because they already remit with each return, the instalment machinery only applies to businesses whose reporting period is a full fiscal year.
Newly registered businesses don’t have a previous fiscal year on the books, so no instalments are required during the first year of registration.2Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – Find Out if You Need to Pay Special rules govern whether you have to start in year two, so check your obligations before that second year begins.
How Much Each Payment Should Be
You have two ways to calculate the amount, and the choice matters for cash flow.
Previous-Year Method
Take the net tax from line 109 of last year’s GST/HST return and divide it by four. Each quarterly payment equals a quarter of that total.3Canada Revenue Agency. Calculate Your GST/HST Instalment Payments If last year’s net tax was $8,000, each instalment is $2,000. This is the simpler route and the amount the CRA uses on its instalment reminders. It works well when revenue is stable or rising.
Current-Year Estimate Method
If you expect a slower year, you can base your instalments on your projected net tax for the current year instead. Divide the estimate by four and pay that amount each quarter.3Canada Revenue Agency. Calculate Your GST/HST Instalment Payments More cash stays in your account during a lean year, but the risk is real. If your estimate turns out low, the CRA charges interest on each quarter’s shortfall as though you’d used the previous-year figure. Keep records of how you arrived at your projection, and adjust future payments upward as soon as you see the estimate slipping.
When Instalments Are Due
Each payment is due within one month after the end of the fiscal quarter it covers.4Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – When to Pay For a calendar-year business, that produces four deadlines:
- April 30, covering January through March
- July 31, covering April through June
- October 31, covering July through September
- January 31, covering October through December
If your fiscal year doesn’t line up with the calendar, the same logic applies: each instalment is due on the last day of the month after the quarter closes. Your exact dates appear in My Business Account.
The annual return itself has its own deadline. For businesses with a December 31 year-end and business income, the final balance is due April 30 and the return must be filed by June 15. Every other annual filer files and pays three months after the fiscal year-end.5Canada Revenue Agency. Reporting Requirements and Deadlines
How to Send the Payment
The CRA takes instalments through several channels:
- Online banking through most Canadian banks and credit unions. No remittance voucher needed.6Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – How to Pay
- My Payment, using a Visa Debit or Debit Mastercard from a participating bank.
- Pre-authorized debit set up through your CRA account, which schedules the withdrawal for you.
- In person at a financial institution, using Form RC160, the personalized interim remittance voucher. Order it from the CRA if you don’t have one on hand.6Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – How to Pay
Any payment of $10,000 or more must be made electronically. This has applied to all remittances to the Receiver General since January 1, 2024, and paying a large amount by cheque when you could reasonably pay electronically can bring a penalty.7Canada Revenue Agency. General Information for GST/HST Registrants
After each payment, check the statement of account in My Business Account to make sure the funds landed in the right period.
What Underpaying Costs You
Missing a deadline or paying less than required triggers interest under section 280 of the Excise Tax Act.8Justice Laws Website. Excise Tax Act – Section 280 There is no separate penalty on underpaid instalments; those provisions were eliminated in 2007. What remains is interest at the prescribed rate, which sits at 7% for the first quarter of 2026.9Canada Revenue Agency. Interest Rates for the First Calendar Quarter
Interest compounds daily on the outstanding amount. It starts the day after the missed deadline and runs until either you pay or your annual return balance falls due, whichever comes first.10Canada Revenue Agency. GST/HST Memorandum 16.2 – Penalties and Interest Daily compounding builds faster than most people expect over a full quarter.
This is the pressure point for the current-year estimate method. If your projection was too low, the CRA calculates interest on the gap between what you paid and what the previous-year method would have required, from each missed quarterly deadline forward.
Late Filing Penalty on the Annual Return
Instalment interest is separate from the penalty for filing your annual return late. If the return is late and you owe money, the penalty is 1% of the balance owing plus 0.25% for each full month the return is overdue, up to twelve months.11Canada Revenue Agency. GST/HST Filing Penalties On a $10,000 balance, that’s $100 immediately and $25 per full month afterward. No filing penalty applies if the CRA owes you a refund or your balance is zero.
Reconciling at Year-End
When you file your annual return, the total of your instalment payments goes on line 110, and the CRA compares it to your actual net tax on line 109.12Canada Revenue Agency. Remit (pay) the GST/HST by Instalments – Report Instalments Short of what you owe? Pay the difference by the return’s payment deadline. Paid more than you needed to? Claim the excess as a refund on the return. The refund is processed after the CRA assesses the return and only if you have no outstanding debts or missing returns on the account, so don’t plan around getting the money back before assessment is complete.