Instalments and the CRA
For Individuals
Tax instalments are payments you make throughout the year to cover the taxes you normally pay in one lump sum on April 30 of the following year. You pay these instalments during the year while you are earning the income, similar to how an employer deducts tax directly from each pay period.
You may have to pay tax instalments for 2023 year's taxes, if your net tax owing is more than $3,000 for either 2022 or 2021.
Tax instalment payments are due by the following dates (except farmers and fishers who have one due date on December 31):
March 15
June 15
September 15
December 15
For example, if you owe $5,000 in taxes for the 2022 year, you may be required to pay $1,250 on each of the 4 dates above in 2023 in order avoid instalment interest charged by the Canada Revenue Agency (CRA). These instalments will be applied to your 2023 balance owing at April 30. If there is less than $5,000 owing, then you will receive a refund of the difference.
For Corporations
For corporations, instalments are required in a similar way to individuals. The $3,000 threshold still applies, as well as the calculation for payments. Generally, corporations have to pay their taxes in monthly or quarterly payments. The due dates are based on the fiscal year end of the corporation.
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