Tax instalments are quarterly prepayments of the income tax you expect to owe at year-end. As a freelancer, no one withholds tax from your client payments — so if your tax bill becomes large enough, the CRA requires you to pay as you go rather than settling a large balance every April.
When Are Instalments Required?
The CRA requires quarterly instalments when your net tax owing exceeds $3,000 (after any source deductions from employment income) in the current year AND in either of the two prior years. In Quebec, the threshold is $1,800.
If this is your first year of self-employment and your tax owing is $3,000+, you are not yet required to make instalments for the current year — but you will be the following year if the threshold is again exceeded. The CRA typically sends you instalment reminders if you are required to pay.
2026 Instalment Due Dates
| Payment | Due Date |
|---|---|
| First instalment | March 15, 2026 |
| Second instalment | June 15, 2026 |
| Third instalment | September 15, 2026 |
| Fourth instalment | December 15, 2026 |
If a date falls on a weekend or public holiday, the due date shifts to the next business day.
How to Calculate Your Instalment Amount
The CRA offers three methods — you may use whichever results in the lowest instalments without incurring penalties:
Method 1: Prior Year Amount (Simplest)
Pay one quarter of your previous year’s net tax owing each quarter. If you owed $8,000 in 2025, pay $2,000 per quarter in 2026. Safe — no interest charged even if you owe more at year-end.
Method 2: CRA Instalment Reminders
The CRA mails or posts to My Account instalment reminders in February and August, with suggested amounts based on your prior year. Pay the suggested amounts to avoid interest automatically.
Method 3: Current Year Estimate
Estimate your current year’s tax owing and pay one quarter each quarter. Most accurate if your income increased significantly, but you may owe interest if your estimates are too low.
Practical approach: Set aside 25–30% of each client payment in a separate account throughout the year, then pay the Method 1 (prior year) amounts on the quarterly dates. If your income is significantly higher than last year, increase instalments accordingly.
How to Pay
- Online banking: Add “CRA (revenue) – 2026 personal income tax instalments” as a payee in your bank’s bill payment system
- CRA My Account → Make a Payment: Pay directly through your CRA account using your bank
- Pre-authorized debit: Set up recurring payments through My Account
- In person: At any Canadian financial institution with a remittance voucher (available from My Account)
What Happens If You Miss an Instalment?
Missing instalments or underpaying triggers instalment interest, charged at the CRA’s prescribed rate (approximately 7–8% in 2026, compounded daily) from the due date of the missed payment. You do not get a late-filing penalty for missed instalments — only interest. Pay as soon as possible to stop interest from accumulating.
If you pay the full balance owing by April 30, the CRA may offset some instalment interest against any overpayment on your final return — but does not eliminate it entirely.
Frequently Asked Questions
Do I still need to pay instalments if I am going to get a refund?
If you expect a refund, your net tax owing is zero or negative, so instalments are typically not required. Instalments are based on your prior year tax owing — if that was also low, the CRA will not send instalment reminders. Monitor your own situation if income fluctuates significantly.
What if I have both employment income and self-employment income?
Instalment requirements are based on net tax owing after all source deductions. If your employer withholds enough to cover your combined employment + self-employment tax bill, instalments may not be required. If not (because self-employment income pushes total owing over $3,000), instalments apply.
Can I pay instalments for GST/HST at the same time?
No — income tax instalments and GST/HST remittances are separate payments to separate CRA accounts. Income tax instalments go to your personal income tax account; GST/HST remittances go to your GST/HST account. Each has its own payment process and due dates.