How to Make CRA Quarterly Tax Installment Payments

If you owe the Canada Revenue Agency more than $3,000 in a year ($1,800 in Quebec) on income that wasn’t taxed at source, you generally have to send CRA quarterly tax installment payments on March 15, June 15, September 15, and December 15. You can calculate each payment three different ways, and you can send it through online banking, pre-authorized debit, the CRA’s My Payment portal, a teller at your bank, or an approved third-party credit card processor. Miss a payment or underpay, and interest starts compounding daily at the prescribed rate, which is 7% for the first half of 2026.¹²

Do You Actually Owe Installments This Year

You owe installments for 2026 only if two conditions are both true: your estimated net tax owing for 2026 will be more than $3,000 ($1,800 for Quebec residents), and your net tax owing in either 2025 or 2024 also exceeded that amount.³ One year over the threshold isn’t enough. If last year was your first big balance, you can wait to see what this year looks like before setting up installments.

“Net tax owing” is broader than income tax alone. It includes Canada Pension Plan contributions payable and any voluntary Employment Insurance premiums on top of federal and provincial income tax.³ Self-employed people pay both halves of CPP, so they hit the threshold at lower income levels than salaried filers often expect.

The CRA usually flags you by sending Form INNS1 (Instalment Reminder) or Form INNS2 (Instalment Payment Summary) when its records show you meet the criteria.⁴ The reminder is a helpful prompt, not the trigger. If you meet the two-year test, the obligation exists whether the form arrives or not.

The Four Payment Due Dates

Most individuals pay on these four dates:⁵

March 15
June 15
September 15
December 15

When any of those dates lands on a weekend or a public holiday recognized by the CRA, the deadline moves to the next business day.⁵ A payment counts as on time if it’s received or postmarked by that day. Electronic payments through a bank usually take a couple of business days to reach the CRA, so leaving it until the due date itself can be risky.

If your main source of income is farming or fishing, the schedule collapses to a single annual installment due December 31, with a reminder from the CRA in November.

How Much to Send Each Quarter

The CRA gives you three ways to figure out each payment.⁶ Picking the right one keeps you from either overpaying or getting hit with interest for underpaying.

The no-calculation option is the simplest. You pay the exact amounts printed on the installment reminders the CRA mails you. The agency bases those figures on your most recently assessed returns, and the March and June amounts often differ from September and December because the CRA updates the calculation once it processes your latest return. As long as you pay those amounts on time, you’re protected from interest charges even if your actual year-end tax turns out to be higher.

The prior-year option has you take your 2025 net tax owing (including CPP and voluntary EI), divide by four, and pay that amount each quarter. It’s useful when your income was steady last year and you’d rather work from a single known figure than the CRA’s split-year estimates.

The current-year option uses your estimate of 2026 net tax owing, CPP, and voluntary EI. This is the right choice when your income is dropping significantly compared to prior years, since it stops you from overpaying based on outdated numbers. It’s also the method to use when a prior year included a one-time event like a large capital gain you won’t repeat, because tax can’t be withheld at source on capital gains, rental income, or investment income, so those amounts flow entirely through the installment system.⁶

The trap in the current-year option is underestimating. Forget a late-paying consulting contract, skip CPP in your math, and the CRA charges interest on the shortfall from each due date you missed. When you’re not sure, the no-calculation option is the safest default because paying the CRA’s stated amounts on time shields you from interest.

How to Send the Payment

The CRA accepts installment payments through several channels. Which one you pick mostly depends on your bank setup and how much lead time you want to build in.

Online banking. Add the CRA as a payee through your bank’s bill payment service. This is the most common method and usually the fastest to process.
My Payment portal. Pay directly on the CRA website using a Visa Debit or Debit Mastercard from a participating Canadian financial institution.⁷
Pre-authorized debit. Set up automatic withdrawals from your chequing account through CRA My Account, My Business Account, or Represent a Client. Payments have to be scheduled at least five business days before the first withdrawal. Good option if you want it running on autopilot.⁸
At a bank counter. Bring a personalized remittance voucher to your financial institution and pay in person.
Credit card through a third-party provider. The CRA doesn’t accept credit cards directly. You can pay through PaySimply or Plastiq, the two approved processors. Both charge service fees, and the payment doesn’t arrive instantly, so build in extra lead time.⁹
Wire transfer for non-residents. If you don’t have a Canadian bank account, wire funds in Canadian dollars to the Receiver General for Canada through the Bank of Nova Scotia. Include your CRA account number in the description field, specify “OUR” in the charges field so fees aren’t deducted from the payment amount, and fax your payment confirmation to the CRA’s Revenue Processing Section afterward.¹⁰

Whichever method you pick, confirm the payment posted by checking the “Account balance and payments” section of your CRA My Account. Processing delays happen, and catching a missing payment early beats finding it months later with interest on top.

What Late or Short Payments Cost

Miss a payment or pay less than you should, and the CRA charges interest on the shortfall from the due date you missed. Interest compounds daily at the prescribed rate, which resets each quarter. For the first half of 2026, the rate on overdue tax is 7%.¹² Interest accrues under subsection 161(2) of the Income Tax Act from the day the payment was due until you actually pay or until your annual return is assessed, whichever comes first.¹¹ At 7% compounded daily, a $5,000 shortfall accumulates roughly $350 in interest over a full year.

There’s also an offset method that can work in your favour. If you overpay or prepay an installment early, you earn a credit at the same interest rate that offsets charges from later shortfalls. The CRA won’t refund the overpayment interest, but it can wipe out or reduce interest on a missed payment elsewhere in the year. Front-loading is a legitimate move if you know a later quarter is going to be tight.

A separate penalty under section 163.1 of the Income Tax Act kicks in when your total installment interest for the year passes $1,000. The CRA takes your actual installment interest, subtracts the greater of $1,000 or 25% of the interest you would have owed if you’d made no payments at all, and charges 50% of the difference.¹² In practice, the penalty only bites people who are substantially behind. Keep interest under $1,000 and the penalty doesn’t apply.

Interest and penalty charges are calculated automatically when the CRA assesses your annual return. You won’t get a separate bill during the year. Everything appears at filing time.

Ways to Reduce or Eliminate Installments

The installment obligation is driven by net tax owing at year-end. Get that number below $3,000 ($1,800 in Quebec) and you’re out of the system.

If you have a job or a pension alongside your self-employment or investment income, ask the payer to withhold extra tax from each payment. File a revised TD1 form requesting the additional deduction.¹³ The extra withholding lowers your balance owing at filing, and if it pulls you under the threshold, the installment obligation goes with it. Retirees drawing from multiple pensions often benefit here, since no single payer withholds enough on its own.

Timing deductions can also help. An RRSP contribution before the filing deadline reduces net tax owing for the prior year. If that contribution drops you below $3,000 for one of the lookback years, you may avoid triggering installments for the current year. The effect isn’t immediate, but it works over a two-year horizon.

Situations That Fall Outside the Standard Rules

If someone who was paying installments dies during the year, no further installments are due after the date of death. Only installments that were already due but unpaid before death still need to be remitted, and the executor handles any remaining balance through the final return.¹⁴

Non-residents earning rental income from Canadian property don’t use the quarterly installment system at all. Instead, the property manager or tenant must withhold 25% of the gross rental income and remit it to the CRA by the 15th of the following month. Because withholding on gross rent is steep, most non-resident landlords file Form NR6 to have the withholding calculated on net rental income. The NR6 must be submitted before January 1 of the year (or before the first rental payment is due) and the CRA has to approve it in writing before the reduced rate takes effect.¹⁵

1
Canada Revenue Agency. Interest Rates for the First Calendar Quarter
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Canada Revenue Agency. Interest Rates for the Second Calendar Quarter
3
Canada Revenue Agency. Required Tax Instalments for Individuals
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Canada Revenue Agency. Line 47600 – Tax Paid by Instalments
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Canada Revenue Agency. Required Tax Instalments for Individuals – Payment Due Dates
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Canada Revenue Agency. Required Tax Instalments for Individuals – Options to Calculate
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Canada Revenue Agency. Payments to the CRA
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Canada Revenue Agency. Make a Payment – Payments to the CRA
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Canada Revenue Agency. Pay Through a Third-Party Service Provider – Payments to the CRA
10
Canada Revenue Agency. Pay at a Bank or Credit Union Through Wire Transfer
11
Justice Laws Website. Income Tax Act – Section 161
12
Justice Laws Website. Income Tax Act – Section 163.1
13
Canada Revenue Agency. Increase or Reduce Income Tax Deducted at Source
14
Canada Revenue Agency. Prepare Tax Returns for Someone Who Died
15
Canada Revenue Agency. T4144 Income Tax Guide for Electing Under Section 216