When the time comes to paying your personal or business taxes, CRA offers several ways to pay — paying in person at your bank or any Canada Post outlet across Canada, by sending a cheque or paying online.
Among those, we will outline debit card and online banking payments as they are easier and more convenient.
Pay by Debit Card: CRA my payment service allows you to pay with your debit card through Interac® online. To use this service, you need an activated debit card with one or more logos - Interac Debit, Visa Debit, Debit Mastercard. To make a payment:
Payments are usually processed by the CRA within 1 to 3 business days. To avoid fees and interest charges, please make sure you pay on time.
Online banking - You can set up an electronic funds transfer to the Canada Revenue Agency (CRA) through your financial institution's online banking app or website. To set up a payment:
Payments are usually received by the CRA within 5 business days. To avoid fees and interest, we recommend setting up a payment in advance.
Filing Compliance - As late filing penalties can add up very quickly we recommend filing your taxes on time even if you can't afford to make the tax payment on the same day.
Payment Arrangement - If you cannot pay in full, we recommend paying what you can by the deadline and communicate with the CRA as soon as possible to arrange the payment plan. Please note that for most tax owing, interest compounds daily, at the rate set by law, until you pay the amount you owe in full.
Sometimes, CRA will request that you pay the current year’s taxes in installments during that year. For example, you may be asked to pay installments towards your expected 2021 taxes owing in 4 quarterly instalments throughout 2021.
Even though this may seem like “pre-paying” your taxes, CRA doesn’t see it that way. When you consider that employees pay tax on every paycheque, quarterly tax installments are actually delayed when compared to the employee’s tax payments.
Personal Income Tax Instalments - If your net tax owing is more than $3,000 in a given year, you may need to pay instalments towards your next year's tax bill, payable quarterly - March 15, June 15, September 15 and December 15.
The instalment payment frequency requirements are generally depending on your corporation type, compliance history and your current or previous year tax due. There are some special situations which CRA outlines that you do not have to pay instalments.
GST/ HST Instalments - If you are filing GST/ HST on an annual basis and your tax owing is more than $3,000 in a given year, you could be required to pay quarterly instalment payments in the following year. The payments are usually equal to one-quarter (¼) of your net tax from the previous year.
Late/ Unpaid Instalments - Interest and possible penalty charges will be applied if you do not pay your required tax instalments or paid insufficient amounts. More information about interest and penalties charges can be found here.