CRA Quarterly Tax Instalments: Complete Guide for Canadian Businesses in 2026

One of the most common — and costly — compliance mistakes Canadian businesses make is missing CRA quarterly tax instalment payments. Unlike personal tax, where many Canadians pay their full balance in April, corporations and many self-employed individuals must make instalment payments throughout the year. Missing or underpaying these instalments triggers arrears interest that compounds daily. Here is everything you need to know.

What Are CRA Tax Instalments?

CRA tax instalments are periodic prepayments of income tax made throughout the year before your annual return is filed. They exist because Canada's tax system operates on a pay-as-you-earn basis. Just as employees have income tax withheld from each paycheque, businesses and self-employed individuals with no withholding at source must send estimated tax payments to the CRA at regular intervals.

Instalments are not an additional tax. They are advance payments of the tax you already owe for the current fiscal year. If you overpay through instalments, the excess is refunded when your annual return is filed.

Who Must Pay CRA Quarterly Instalments?

Corporations must pay monthly or quarterly instalments if their net tax owing for the current or either of the two preceding tax years exceeds $3,000.

Self-employed individuals and other T1 filers must pay quarterly instalments if their net tax owing (after withholdings) exceeds $3,000 in the current year and in either of the two previous years.

Partnerships generally pass through income to partners, who are then individually responsible for instalment obligations based on their share of partnership income.

If you are unsure whether you are required to pay instalments, CRA sends instalment reminders to taxpayers who qualify. However, receiving or not receiving a reminder does not change your legal obligation — if you meet the threshold, you must pay.

Corporate Tax Instalment Schedules

Monthly Remitters

Most Canadian corporations remit monthly instalments. Monthly instalments are due on the last day of each month of the corporation's fiscal year.

Quarterly Remitters (Eligible CCPCs)

Canadian-Controlled Private Corporations (CCPCs) that meet specific conditions — including having a perfect compliance record, annual taxable income under $500,000, and taxable capital employed in Canada under $10 million — may qualify to remit quarterly instead of monthly.

Quarterly instalment due dates for an eligible CCPC with a December 31 fiscal year end are:

Quarter	Due Date
Q1	March 31
Q2	June 30
Q3	September 30
Q4	December 31

For corporations with other fiscal year ends, the quarterly dates are calculated from the start of the fiscal year. A corporation with a September 30 fiscal year end would have quarterly instalments due on December 31, March 31, June 30, and September 30.

How to Calculate Your CRA Instalment Amount

CRA offers three methods for calculating instalment amounts. You can use whichever method results in the lowest payment — as long as you do not underpay relative to your actual liability.

Method 1: Current Year Estimate

Pay 1/12 (monthly) or 1/4 (quarterly) of your estimated current year's tax liability. This method is most accurate but requires you to estimate your current year income.

Method 2: Prior Year Basis

Pay 1/12 or 1/4 of your tax liability from the immediately preceding tax year. This is the simplest method and eliminates the need to estimate current year income.

Method 3: Two-Year Average (Corporations)

Some corporations may use an averaging method based on their prior two years of tax liability. CRA's instalment reminder notices typically show the calculated amounts under each applicable method.

Practical guidance: For most small and mid-sized Canadian corporations, the prior year basis (Method 2) is the most administratively straightforward. If your business is growing significantly, the current year estimate (Method 1) may result in lower instalments but requires careful income forecasting.

Instalment Due Dates by Fiscal Year End

The most common source of instalment errors is misunderstanding that instalment dates are tied to the corporation's fiscal year end — not to the calendar year. Here are the quarterly instalment due dates for the most common Canadian fiscal year ends:

December 31 fiscal year end:

• Q1: March 31
• Q2: June 30
• Q3: September 30
• Q4: December 31

March 31 fiscal year end:

• Q1: June 30
• Q2: September 30
• Q3: December 31
• Q4: March 31

June 30 fiscal year end:

• Q1: September 30
• Q2: December 31
• Q3: March 31
• Q4: June 30

September 30 fiscal year end:

• Q1: December 31
• Q2: March 31
• Q3: June 30
• Q4: September 30

For corporations with other fiscal year ends, calculate quarterly dates by dividing your fiscal year into four equal periods beginning from the first month of your fiscal year.

What Happens if You Miss a CRA Instalment?

CRA charges arrears interest on late or insufficient instalment payments. The rate is the prescribed interest rate plus 2% — compounded daily. As of 2026, this is a meaningful penalty that accumulates quickly on larger balances.

The calculation of instalment interest is complex — CRA compares what you paid against what you should have paid under each of the three methods and charges interest on any shortfall from the most favourable applicable method. This means that even if you paid something, you may owe interest if your payments did not meet the required threshold under any of the three methods.

If your instalment interest for the year exceeds $1,000, CRA may also assess a penalty equal to 25% of the instalment interest — adding further cost to an already expensive mistake.

CRA Instalment Reminders

CRA sends instalment reminder notices to corporations and individuals who are required to pay. For corporations, these typically arrive two weeks before each instalment due date. For T1 filers, CRA sends reminders in February and August.

Important caveat: CRA reminder notices show suggested payment amounts, but these are based on information available to CRA — they may not reflect your actual current year situation. Always verify the amounts against your own records and your accountant's calculations.

How to Pay CRA Instalments

Corporate instalments can be paid through:

• Online banking: Most Canadian banks offer CRA business payments. Use the correct account number (15-digit Business Number + RC0001 for the first account)
• My Business Account: CRA's online portal accepts direct debit payments
• In person: At any Canadian financial institution using a remittance voucher
• Mail: Cheque payable to the Receiver General of Canada with the remittance voucher

Never pay instalments without including your Business Number and the correct payment type code. CRA processes millions of payments and misapplied payments are a common source of errors.

Instalments and the T2 Balance Due

Instalment payments reduce — but do not replace — your T2 balance due. The remaining balance after instalments must be paid by:

• 2 months after fiscal year end for most corporations
• 3 months after fiscal year end for eligible CCPCs on the full rate of the small business deduction

If your instalments were accurate, the balance owing at year-end should be small. If you significantly underpaid, you will face both the year-end balance and arrears interest on the underpayment.

Tracking Your Instalment Dates

Managing instalment deadlines across multiple corporations with different fiscal year ends is one of the most administratively challenging aspects of running a Canadian accounting practice. Each corporation has a unique instalment schedule tied to its fiscal year, and the dates do not align neatly with the calendar year.

The free AINative Tax Deadline Calculator handles this automatically. Enter your business type and fiscal year end month and it calculates every upcoming CRA deadline — including quarterly instalment dates — with days remaining and urgency indicators. Export the full calendar to Google Calendar or download a .ics file for any calendar application.

This is not tax advice — always confirm specific instalment amounts and due dates with your accountant. But for getting a complete picture of your compliance calendar, the tool does the date math so you do not have to.

Summary: CRA Quarterly Instalments at a Glance

Item	Detail
Who must pay	Corporations and individuals with tax owing > $3,000
Frequency	Monthly (most corps) or quarterly (eligible CCPCs)
Calculation methods	Current year estimate, prior year, or two-year average
Penalty for late payment	Arrears interest at prescribed rate + 2%, compounded daily
Additional penalty	25% of instalment interest if interest exceeds $1,000
Balance due date	2 months after year end (3 months for eligible CCPCs)