Due dates for payments

Corporate tax instalment due dates depend on your business's tax year as well as whether you pay instalments monthly or quarterly.

Your balance of tax at the end of the tax year is paid on the balance-due day.

Eligibility to pay quarterly instead of monthly instalments

Corporate tax instalments are generally required to be paid monthly, however, your business may be able to pay instalments quarterly if you meet all of the following criteria:

You are a Canadian-controlled private corporation (CCPC)
You have a perfect compliance history
Together with any associated corporations, for the current or previous tax year you have both:
- Taxable income of $500,000 or less
- Taxable capital employed in Canada for the tax year of $10 million or less

What we consider a perfect compliance history

We consider you to have a perfect compliance history if, during the previous 12 months ending at the time your last instalment was due:

You remitted on time all the amounts required for:
- GST/HST
- Withholding under subsection 153(1) of the Income Tax Act
- Canada Pension Plan contributions
- Employment insurance premiums
You filed on time all returns required under the Income Tax Act or under Part IX of the Excise Tax Act (GST/HST)

If you become ineligible for quarterly instalments mid-year

When a corporation ceases at any time in a tax year to be eligible to pay quarterly instalments:

The corporation is still allowed to pay its next instalment due at the end of the current quarter
Following the next instalment, they will have to begin to pay monthly instalments following that quarter

For example, if a corporation ceases to be eligible for quarterly instalments on May 31, 2024, it is allowed to pay its next instalment due at the end of the current quarter, which is June 30, 2024. The corporation will have to begin paying monthly instalments starting on July 31, 2024.

Refer to: How to calculate instalment payments if you switch from quarterly to monthly instalments mid-year

Instalment due dates

The first instalment payment is due:

Monthly instalments: one month less a day from the starting day of your tax year
Quarterly instalments (if eligible): one quarter less a day from the starting day of your tax year

The rest of your instalment payments are due on the same day of each month or each quarter that follows.

You can view your instalment due dates by using the "Calculate and pay instalment payments" service in:

Represent a Client, if you are an authorized representative or employee
My Business Account, if you are the business owner

Example: Corporation tax year same as calendar year

First day of tax year: January 1, 2024
End of tax year: December 31, 2024

Each of the monthly instalment payments is due by the last day of each month during the tax year. The first payment is due by January 31, 2024. The last payment is due by December 31, 2024.

If the corporation is allowed to make quarterly instalment payments, the payments are due on March 31, June 30, September 30, and December 31, 2024.

Example: Corporation tax year different than calendar year

First day of tax year: October 10, 2023
End of tax year: October 9, 2024

The first monthly instalment payment is due by November 9, 2023. The last payment is due by October 9, 2024.

If the corporation is allowed to make quarterly instalment payments, the payments are due on January 9, April 9, July 9, and October 9, 2024.

Balance-due day

The balance-due day is the date by which you have to pay the remainder of the tax you owe for the tax year, after you have deducted the instalments you already paid.

Generally, the balance-due day for corporate income taxes is:

2 months after the end of your tax year

CCPCs may be eligible for balance-due day 3 months after the end of the tax year

Regular corporate income tax (Parts I, VI, VI.1, XIII.1) payments may qualify for a balance-due day 3 months after the end of the tax year, if all 3 of the following conditions are met:

The corporation is a CCPC throughout the tax year
The corporation claimed the small business deduction for the current or previous tax year
Either of the following criteria are met:
- The corporation's taxable income for the previous tax year does not exceed its business limit for that tax year (if the corporation is not associated with any other corporation during the tax year)
- The total of the taxable incomes of all the associated corporations for their last tax year ending in the previous calendar year does not exceed the total of their business limits for those tax years (if the corporation is associated with any other corporation during the tax year)

For the purposes of calculating a new corporation's taxable income when they were created from an amalgamation or wind-up, you must use the predecessor corporation's income:

Amalgamations

The total taxable income is the total of the predecessor corporations' taxable income for their tax years that ended when the new corporation arose from an amalgamation.

This calculation for total taxable income applies to the balance-due day deadline calculation as well as determining the business limit.

Wind-ups

The taxable income for the previous tax year, after it receives the assets of a subsidiary corporation that is winding up, is the total of:

The parent corporation's taxable income for that year
The subsidiary corporation's taxable income for its tax years ending in the calendar year that the parent corporation's previous tax year ended

This calculation for total taxable income applies to the balance-due day deadline calculation as well as determining the business limit.

For determining balance-due days, the previous-year taxable income of corporations and associated, subsidiary, and predecessor corporations means taxable income before considering specified future tax consequences, such as applying loss carrybacks.

For information on your business limit, see Chapter 4 of Guide T4012, T2 Corporation – Income Tax Guide.

Anticipating a reassessment

If you are anticipating a reassessment, you may want or need to pay an amount before the reassessment is completed (make an advanced deposit) to avoid additional interest.

Refer to: Prepaying a reassessment

Situations that may affect your balance-due day

Your balance-due day may be affected by certain events like amalgamations or wind-ups.

Amalgamations

The balance-due day of a new corporation formed after an amalgamation has taken place will be affected by the new corporation's taxable income for the previous year. This taxable income is the total of the predecessor corporations' taxable income for their tax years that ended just before they amalgamated. See paragraph 87(2)(oo.1) of the Income Tax Act.

The same rule applies for determining the business limit.

Wind-ups

To determine a parent corporation's balance-due day in its first tax year after it receives the assets of a subsidiary corporation that is winding up [paragraph 88(1)(e.9) of the Income Tax Act], the taxable income for the previous tax year is the total of:

The parent corporation's taxable income for that year
The subsidiary corporation's taxable income for its tax years ending in the calendar year that the parent corporation's previous tax year ended

The same rule applies for determining the business limit.

Certain events may also change the way you calculate your instalment payment amounts.
Refer to: Situations that may affect your instalment calculations

Paying on time

You are responsible for making sure that your payments are received by the CRA on or before the due date. Late payments, including cheques post dated after the due date, may be charged late fees and/or interest.

The CRA considers your payment made on the day that:

It is processed at any financial institution belonging to the Canadian Payments Association. Payments made at an automated teller machine (ATM) may not be processed that same day
It is received by the CRA

This applies to all payment methods, including by mail and by third-party service providers. If you are using these services, you must clearly understand their terms and conditions.

When a due date falls on a Saturday, Sunday, or public holiday recognized by the CRA, your payment is considered on time if the CRA receives it on or before the next business day.

Interest and penalties

We charge instalment interest on late or insufficient instalment payments. We also pay applicable refund interest on certain overpayments. In some cases, you may be able to reduce or cancel interest charges. Interest is compounded daily. The interest rate is determined every three months according to the prescribed interest rate.

Refer to: Understanding corporate tax interest

We may also apply a penalty if you do not comply with your payment requirements.

Refer to: Avoiding corporate tax penalties

When we charge instalment interest

You will be charged instalment interest if both the following apply:

You are required to pay by instalments
You did not make any of your instalment payments, paid late, or paid less than what you had to pay

Underestimating your current-year taxes when calculating instalments

In some cases, underestimating your taxes payable may result in instalment interest, even if you pay on time.

If you based your required instalment payments on an estimate of your current year income and taxes (option 1), we will charge interest if both of the following are true:

The instalments you paid were less than your final tax payable
A previous-year instalment calculation (option 2 or 3) would have resulted in you making higher instalment payments

If you use a previous-year instalment calculation (option 2 or 3), we will not charge you instalment interest, as long as you pay the correct amounts on time, even if you have a balance due at the end of the year.

Read more about each instalment payment calculation option.

Find out how to change your instalment amounts.

How instalment interest is calculated

$A
Interest on each instalment payment you should have paid
We calculate interest from the day it was due to your balance due date, based on the instalment payment calculation option that results in the least amount of interest.
minus by $B
Interest on each instalment you paid
We calculate the interest for the year starting from the date the payment was made or January 1 (whichever date is later) up to the balance due date.
equals $C
Your charge (if more than $25)
The interest you owe is the difference between A and B.

When we charge instalment penalties

You may have to pay a penalty if your instalment payments are late or less than the required amount. We apply this penalty only if your instalment interest charges are more than $1,000.

How instalment penalties are calculated

To calculate the penalty, we determine which of the following amounts is higher.

If a flat rate of $1,000 is higher: Option 1 of 2

You are charged: $1,000
If 25% of the interest is higher: Option 2 of 2

You are charged: 25% of the instalment interest you would have paid if you had not made instalment payments for 2024

We subtract the higher amount from your actual instalment interest charges for 2024. We then divide the difference by 2, and the result is your penalty.

Reduce your instalment interest and penalty charges

You can reduce or eliminate interest and penalties if you do one of the following:

Overpay your next instalment payment
Pay your next instalment early

This will allow you to earn instalment credit interest. This credit interest is not refundable and can only be used against any interest charges on insufficient or late payments for the same tax year.

Instalment interest and penalty calculation example

Instalment interest, penalties, and credit interest amounts are determined at the end of the tax year.

Example: Calculating instalment interest, penalty, and credit interest

Corporation D has a December 31 year-end and has to make monthly instalment payments of $75,000 starting in January 2024.

Corporation D only makes two instalment payments in the year. It makes one payment of $120,000 on March 12 and a second payment of $150,000 on April 25.

Therefore, when we assess Corporation D's return, we will charge $16,081.36 in instalment interest. We used an underpayment interest rate of 5% compounded daily in the following calculation.

Summary of instalment interest for Corporation D
Date 2024	Instalment payment due ($)	Payment received ($)	Balance ($)	Number of days	Interest ($)
January 31	75,000		75,000.00	29	297.70
February 28	75,000		150,297.70	12	246.57
March 12		120,000	30,544.27	19	79.38
March 31	75,000		105,623.65	25	361.33
April 25		150,000	(44,015.02)	5	(30.07)
April 30	75,000		30,954.91	31	131.36
May 31	75,000		106,086.27	30	435.64
June 30	75,000		181,521.91	31	770.32
July 31	75,000		257,292.23	31	1,091.86
August 31	75,000		333,384.09	30	1,369.04
September 30	75,000		409,753.13	31	1,738.85
October 31	75,000		486,491.98	30	1997.77
November 30	75,000		563,489.75	31	2,391.26
December 31	75,000		640,881.01	59	5,200.35

The total instalment interest we will charge Corporation D on its balance-due day of February 28, 2025, is $16,081.36.

Penalty

Based on Corporation D's instalment interest of $16,081.36, we will assess a penalty of $4,480.31 as follows:

Calculation of instalment penalty for Corporation D
Description	Amount
Instalment interest	$16,081.36
Minus the greater of: $1,000, and 25% of the instalment interest charged if Corporation D had made no payment at all ($28,482.94 × 25%)	$7,120.73
Difference	$8,960.63
Instalment penalty (one-half of the difference)	$4,480.31

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Date modified:: 2024-04-10

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