Canadian Tax Instalments Explained for Individuals
Who must pay, the four due dates, the three calculation options, and instalment interest
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
Canadian individuals must pay income tax in quarterly instalments if their net tax owing exceeds C$3,000 (C$1,800 in Quebec) in the current year and in either of the two previous years. Instalments are due March 15, June 15, September 15, and December 15. Self-employment, rental, investment, and some pension income with little or no withholding usually triggers them.
On this page
The calculation options
| Option | Basis |
|---|---|
| No-calculation (CRA reminders) | Pay the amounts on the CRA's instalment reminders — no interest if paid on time even if they prove too low |
| Prior-year | One-quarter of last year's net tax owing each quarter |
| Current-year | One-quarter of the estimated current-year net tax owing — interest if the estimate is too low |
Interest and penalty
Instalment interest at the prescribed rate for overdue tax — the base rate plus 4 percentage points, 7 percent for October 1 to December 31, 2026 — on late or insufficient instalments, compounded daily (not charged if C$25 or less). The penalty applies only if the year's instalment interest exceeds C$1,000: it is 50 percent of the interest above the greater of C$1,000 and 25 percent of the interest that would have applied had no instalments been made. Paying more or earlier in a later quarter earns credit interest that offsets earlier shortfalls (contra-interest), though it is never refunded.
The cross-border angle
A U.S. citizen in Canada with U.S.-source investment income pays Canadian instalments on it; a Canadian who moves to the United States mid-year may still owe instalments for the departure year (the departure tax guide). The U.S. side has its own quarterly estimated tax on different dates (April 15, June 15, and September 15, and January 15 of the following year) with a safe harbor (the estimated tax safe harbor guide).
Frequently asked questions
Do I have to pay Canadian tax instalments?
If your net tax owing exceeded C$3,000 this year and in either of the two previous years (C$1,800 in Quebec).
When are instalments due?
March 15, June 15, September 15, and December 15.
What's the safest way to avoid interest?
Pay the amounts on the CRA's instalment reminders on time.
Do U.S. estimated taxes count toward Canadian instalments?
No — each country's prepayments are separate.
Official sources
The Canada Revenue Agency explains: “You may have to pay tax instalments for next year's taxes, if your net tax owing is more than $3,000 (for Quebec $1,800) for 2026 and in either 2025 or 2024.” — Canada Revenue Agency, Required tax instalments for individuals, https://www.canada.ca/en/revenue-agency/services/payments/payments-cra/individual-payments/income-tax-instalments.html
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our Canadian Tax Desk handles Canadian instalment planning alongside U.S. estimated taxes for cross-border filers. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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