Options to calculate
You have three options to calculate your instalment payments which could help reduce or eliminate the amounts you are required to pay.
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Decide which option to use
No-calculation option
This option is best if your income, deductions, and credits stay about the same from year to year.
The CRA determines the amount of your instalment payments based on the information from your latest assessed tax return. The amount for the no-calculation option will be indicated on the instalment reminders that the CRA sends you.
Prior-year option
This option is best if your 2024 income, deductions, and credits will be similar to your 2023 amount, but significantly different from those in 2022.
You determine the amount of your instalment payments based on the information from your tax return for the 2023 tax year. Use the calculation chart for instalment payments for 2024 (PDF) to help you calculate your total instalment amount due.
If you make your payments in full by the 2024 due dates, the CRA will not charge instalment interest or a penalty, unless your estimated instalment amounts are too low.
Current-year option
This option is best if your 2024 income, deductions, and credits will be significantly different from those in 2023 and 2022.
You determine the amount of your instalment payments based on your estimated current year (2024):
Use the calculation chart for instalment payments for 2024 (PDF) to help you calculate your total instalment amount due.
If you make your payments in full by the 2024 due dates, the CRA will not charge instalment interest or a penalty, unless your estimated instalment amounts are too low.
Reduce or eliminate tax instalment payments
You can reduce or eliminate your instalment payments by having tax withheld or increasing the amount of tax deducted from these sources:
- Old age security
Use Request for Voluntary Federal Income Tax Deductions (form ISP3520OAS) and send to a Service Canada office
- Canada Pension Plan benefits
Use Request for Income Tax Deductions (form ISP3520CPP) and send to a Service Canada office
- Quebec Pension Plan benefits
For details: Retraite Québec
- EI or pension benefits (employer-sponsored pension plan)
Use Form TD1, 2024 Personal Tax Credits Return, and send to your employer or pension plan administrator
Income tax cannot be withheld from certain types of income, such as self-employment, investment, rental income, and capital gains.
Example – How to eliminate the amount of your instalment payments
Hugh is a resident of Alberta and pays his tax by instalments. His net tax owing has been $3,500 for several years and he expects it will stay the same in 2024.
He decides to have more tax withheld from his income in 2024. In January 2024, Hugh filled out Form TD1 to ask his pension plan administrator to withhold an extra $250 each month from his pension income.
Hugh now estimates his net tax owing will be $500 for 2024. Based on his estimate, he does not have to make instalment payments in 2024 because his net tax owing will not be over $3,000 for 2024. Hugh would disregard the instalment reminders he receives for 2024.
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