Tax Instalments in Canada: $3,000 Threshold, Quarterly Due Dates and Calculation
Updated
If you owed more than $3,000 in net tax (after source deductions) in both the current and one of the two prior years, the CRA expects you to pay quarterly instalments, paying as you go rather than facing one large bill in April. This commonly affects self-employed workers, landlords, retirees whose pensions do not withhold enough, and investors with significant capital gains or dividends. Late or missing payments are charged daily compound interest at the CRA prescribed rate (7% as of Q4 2026, and it changes quarterly). This page is the site’s guide to instalments for individuals; corporations follow different rules, covered in corporate tax instalments. It is part of the Dealing with the CRA directory.
What Are Tax Instalments?
Pay-As-You-Go Tax
Concept
Details
Why required
Pay tax throughout year
For whom
Self-employed, investors, pensioners
Instead of
Single large payment at tax time
Avoids
Large April tax bill
Why CRA Requires Instalments
Reason
Details
Employees
Tax deducted each paycheque
Others
No regular deductions
Solution
Quarterly payments
Who Needs to Pay Instalments?
The $3,000 Rule
Requirement
Details
Current year
Net tax owing >$3,000
AND either prior year
Net tax owing >$3,000
Quebec
$1,800 threshold
Common Situations
Who
Why
Self-employed
No employer deductions
Significant investment income
Dividends, rental, gains
Pensioners
Some pensions don’t withhold
Multiple income sources
Tax may be owing
Net Tax Owing
Calculation
Details
Total tax
Before deducting source deductions
Minus
Tax already withheld
Equals
Net tax owing
Example
Item
Amount
Total tax owed
$15,000
Tax withheld at source
$10,000
Net tax owing
$5,000
If your net tax owing is over $3,000 ($1,800 in Quebec) this year and was also over that in either of the two years before, you have to pay instalments.
Interest on missed instalments compounds daily at the CRA prescribed rate (7% as of Q4 2026, changing quarterly). Paying the amounts on the CRA’s reminder is the simplest of the three options; the current-year estimate avoids overpaying when income has dropped, at the risk of interest if the estimate is low. The four due dates are March 15, June 15, September 15, and December 15. A balance still owing at filing time, if it can’t be paid in full, can be spread out with a CRA payment arrangement.