Let’s face it—CRA deadlines and tax installments aren’t exactly the sexiest topics in business but understanding them is critical if you want to avoid interest, penalties, or worse… the CRA breathing down your neck. If you’re a new or growing business owner in Canada, here’s what you really need to know to stay out of trouble and keep your cash flow predictable.
Does my company need to pay Federal income tax instalments?
If your corporation owes more than $3,000 in federal tax, you’ll likely need to start making quarterly tax installments the following year. That’s right—even if you’re just getting your business off the ground, the CRA expects you to look ahead.
Does my company need to pay GST instalments?
If you are an annual GST filer, generally the same rules apply as federal income tax. If your tax owing for a year is greater than $3,000, you’ll also need to make quarterly GST installments.
If you file your GST quarterly or monthly, you’ll be paying your tax in real time, so there is no need to make adjustments. See the filing and payment due dates for GST below.
Do I need to pay Alberta instalments?
Operating in Alberta? Good news: if you’re a Canadian-Controlled Private Corporation (CCPC) claiming the small business deduction and reporting under $500,000 in taxable income, you’re exempt from Alberta tax installments—though you still owe the tax itself.
When are my instalments due to be paid?
Installments are generally due on the last day of each quarter if you qualify for quarterly payments. Otherwise, expect to pay monthly.
To qualify for quarterly payments:
- Perfect compliance history (you’ve filed and paid everything on time)
- Less than $500,000 in taxable income (combined with associated companies) for the prior year
- Eligible for the small business deduction
- Taxable capital of less than $10M in the previous year (combined with associated corporations).
How do I calculate the instalments corporation is required to pay?
There are three installment calculation methods:
- Current-Year Estimate: A quarter of your estimated tax for this year
- Prior-Year Tax: A quarter of last year’s tax bill
- Any Amount: You set the number (but beware!)
How does the CRA calculate interest on missed instalments?
If you’ve opted for method #3, and your instalments for the year are less than what you owe, and less than the amounts calculated in methods #1 or #2, the CRA will charge you interest on the difference. The CRA charges daily compounded interest at the CRA’s prescribed rates (8% at the time of posting this).
When does the CRA charge penalties for missed instalments?
If there are $1,000 or more penalties in a year, the CRA starts charging penalties on top of the interest, with interest accruing the overdue penalties.
Are there penalties for missed payroll remittances?
Yes, and they are some of the highest in our tax system because you’re essentially holding your employee’s money hostage by failing to send it to the CRA.
- Deadline to send the CRA remittances: Generally, the 15th of the following month
- Penalties:
- 3% if 1–3 days late
- 5% if 4–5 days late
- 7% if 6–7 days late
- 10% if more than a week late
- Repeat offenses? The penalty can shoot up to 20%!
Pro tip: Use a payroll provider (like Wagepoint) to automate this. It’ll save you time, money, and stress.
Key CRA Filing Deadlines to Remember
Corporate Taxes
- Payment: 2 months after fiscal year-end (3-months for Canadian Controlled Private Corporations – which is most small businesses)
- Filing: 6 months after fiscal year-end
- Late Penalties: Up to 17%, plus the prescribed rate of interest on unpaid balances
GST/HST filing and payment due dates
- Annual Filers: Due 3 months post-yearend
- Quarterly/Monthly: One month after period end
- Late Penalty: 1% flat + 25% of that per month (up to 12 months)
T4s and T5s
- Deadline: February 28th of the following year
- Late filing causes compliance headaches, especially for December year-ends
Trusts and Partnerships
- T3s & T5013s: Due March 31st—essential for individuals relying on them for April 30th personal tax deadlines
- T5013s with only corporate shareholders: Due May 31st
Sole Proprietors
- Filing Deadline: June 15th
- Payment Deadline: Still April 30th (yes, really)
Best Practices to Stay on the CRA’s Good Side
- Close Your Year-End Books Promptly
Aim to have your books wrapped up and ready for your accountant within 30 days of your year-end. This is only possible with solid bookkeeping—if you don’t have a pro on your team, it’s time to change that.
Check out: From Chaos to Clarity podcast and blog for more on why good books matter.
- Review Your Books Monthly
Don’t wait until year-end! Review your:
- Sales and expenses
- Receivables and payables
- Shareholder loan accounts
Listen to: A Business Owner’s Guide to Reviewing Their Books at Year End for tips you can apply monthly.
- Set Up Calendar Reminders (Seriously)
Put every CRA-related deadline in your calendar. Better yet, pre-program your installment payments into your online banking so you don’t miss them. If your business has a great year, you can always top them up.
Final Thoughts: The CRA Is Not Your Line of Credit
Using the CRA as a makeshift line of credit is a dangerous game. Their powers go well beyond typical creditors—they can garnish your bank account, seize assets, and they won’t wait around to do it.
The CRA gets the benefit of hindsight in applying interest on missed instalments, whereas if you want to opt for method #3, and short your instalments to match your income, you have to have a bit of a crystal ball.
By staying ahead of your tax obligations, you can keep your business healthy, your stress low, and the CRA off your back.
Get Expert Advice & Follow It
Need help navigating your CRA obligations or untangling a surprise penalty? At Achen Henderson, we’re here to help. Book a consultation today—we love hearing about your business, even when it’s tax talk.