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CRA Prescribed Interest Rates: Quarterly Rates and History

Updated

CRA Prescribed Interest Rate 2026

The CRA prescribed interest rate is set quarterly and affects employee loans, shareholder loans, interest on late tax instalments and balances owing, and income-splitting loans. This page is part of the Dealing with the CRA directory.

2026 Quarterly Rates

QuarterPeriodPrescribed (Base) RateOverdue Tax Rate (All Taxpayers)Refund Rate (Individuals)Refund Rate (Corporations)
Q1 2026Jan 1 – Mar 313%7%5%3%
Q2 2026Apr 1 – Jun 303%7%5%3%
Q3 2026Jul 1 – Sep 303%7%5%3%
Q4 2026Oct 1 – Dec 313%7%5%3%

Source: CRA’s quarterly prescribed interest rate pages (canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates), verified September 29, 2026. The base rate was 3% in every quarter of 2026.

How the Prescribed Rate is Calculated

The base prescribed rate is the average yield on 90-day Government of Canada Treasury bills from the first month of the preceding quarter, rounded up to the nearest whole percentage.

Rate TypeFormula
Base prescribed rateT-bill average, rounded up
Overdue tax interest (individuals and corporations)Base + 4%
Refund interest (individuals)Base + 2%
Refund interest (corporations)Equal to the base rate

What the Prescribed Rate Affects

1. Employee and Shareholder Loans

If your employer, or a corporation you hold shares in, gives you a low-interest or interest-free loan because of your job or your shareholding, you have a taxable benefit equal to:

Prescribed rate − interest you paid (by 30 days after year-end) = taxable benefit rate

Loan ScenarioTaxable Benefit (2026, base rate 3%)
$100,000 interest-free loan$3,000/year taxable benefit
$100,000 loan at 2%$1,000/year taxable benefit
$100,000 loan at 3%+No taxable benefit (if the interest is paid within 30 days after year-end)

2. Income-Splitting Loans (Section 74.5)

A loan to a spouse or family member at the prescribed rate is one exception to the attribution rules (each year’s interest must be paid within 30 days after year-end), and the rate in effect when the loan is made stays locked in for the life of the loan. The rules don't apply to a loan that charges interest at least at the prescribed rate in effect when it was made (or a lower arm's-length rate), with each year's interest paid no later than 30 days after the end of the year (January 30); the prescribed rate for loans made in Q4 2026 is 3%. How the strategy works, and the rest of the attribution rules, are covered in the guide to the attribution rules.

Prescribed Rate When Loan MadeRequired Annual Interest on $500,000 Loan
1% (e.g., Q3 2020 – Q2 2022)$5,000/year
2% (e.g., Q1–Q2 2020)$10,000/year
3% (current, all of 2026)$15,000/year

3. Overdue Tax Payments

Interest on unpaid taxes, instalments, and reassessments is charged at the prescribed rate + 4 percentage points, for individuals and corporations alike:

QuarterOverdue Tax Rate
Q1 20267%
Q2 20267%
Q3 20267%
Q4 20267%

This interest is not tax-deductible for individuals. What the CRA does when a balance stays unpaid is covered in what happens if you don’t pay the CRA, and the options for spreading a balance out in CRA payment arrangements.

4. CRA Refund Interest

CRA pays interest on late refunds to individuals at the base prescribed rate + 2 percentage points (corporations receive the base rate itself, with no add-on):

QuarterRefund Rate (Individuals)
Q1 20265%
Q2 20265%
Q3 20265%
Q4 20265%

Refund interest is taxable income.

Prescribed Rate History

QuarterBase RateQuarterBase Rate
Q4 20263%Q4 20235%
Q3 20263%Q3 20235%
Q2 20263%Q2 20235%
Q1 20263%Q1 20234%
Q4 20253%Q4 20223%
Q3 20253%Q3 20222%
Q2 20254%Q2 20221%
Q1 20254%Q1 20221%
Q4 20245%Q4 20211%
Q3 20245%Q1–Q3 20211%
Q2 20246%Q3–Q4 20201%
Q1 20246%Q1–Q2 20202%

Source: CRA’s quarterly prescribed interest rate pages (one page per quarter from Q4 2021, checked September 29, 2026); 2020 to Q3 2021 from the Department of Finance Canada’s quarterly Revenue Canada rates pages.

Long-Term Trend

PeriodTypical Rate
2020-20211-2%
2022-20231-5% (rising)
2024-20263-6% (peaked 2024, declining since)

Corporate shareholder loans

  • Interest on a loan from your corporation, charged at the prescribed rate for each period the loan is outstanding and paid within 30 days after the end of the year, avoids the interest-rate benefit
  • The benefit is worked out at the prescribed rate for each period the loan is outstanding, so the rate to charge can change from quarter to quarter
  • Repaying the loan within one year after the end of the corporation’s tax year in which it was made avoids the loan inclusion under Section 15(2), as long as the repayment is not part of a series of loans and repayments

Where to find the current prescribed rate

CRA announces each quarter’s prescribed rate before the quarter begins. To find the current and upcoming rates:

  1. Go to canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates.html
  2. Rates are listed by quarter and year
  3. CRA also publishes the T-bill averages used to set each quarter’s rate

For tax planning purposes (particularly prescribed-rate loans), confirm the rate at the start of the quarter in which you are entering the arrangement. For an income-splitting loan, the prescribed rate in effect when the loan was made is the one that counts, even if subsequent quarters see higher rates; for employee and shareholder loans, the benefit is worked out at the prescribed rate for each period the loan is outstanding.

Sources

The figures and rules on this page come from these sources, last checked against them between September 29, 2026 and October 1, 2026. How we check facts.