Pay the GST/HST by instalments


Find out if you need to pay GST/HST by instalments

If you are an annual filer and your net tax for a fiscal year is $3,000 or more, you may have to make quarterly instalment payments throughout the following fiscal year.

If your business has branches or divisions that file separate returns, the threshold limit applies to the total net tax for the whole business, including all branches and divisions.

How to calculate your GST/HST instalment payments

You can calculate your instalment payments online. To use the instalment payment calculator service, see My Business Account or Represent a client. The following determines how to calculate your GST/HST instalment payments based on your situation:

Base your instalment payments on the previous year

These quarterly payments are usually equal to one-quarter (¼) of your net tax from the previous year.

Example 

You are a business with a December 31 fiscal year-end. Your net tax for the 2014 fiscal year was $4,000. You estimate that your net tax for 2015 will be $3,200. We will calculate your quarterly instalments at $1,000 each ($4,000 ÷ 4). However, if you choose to base your instalments on your estimate for 2015, you can make quarterly payments of $800 ($3,200 ÷ 4). Your first instalment is due April 30, 2015. The balance of your net tax for 2014 was due one month earlier, on March 31, 2015.

Base your instalment payments on the current year

You may also choose to base your quarterly instalment payments on an estimate of your net tax for the current year if you expect that it will be less than it was for the previous year.

However, if you estimate your instalments based on your current year and the instalment payments you make are less than the amount you actually should have paid, we will charge instalment interest on the difference.

Special rules for new registrants

If you are a new registrant and an annual filer, you may have to make instalment payments during your next fiscal year even if your net tax is less than $3,000. This could happen if your first year of filing for GST/HST is less than a full fiscal year. To determine if you need to do this, estimate what your net tax will be for your next fiscal year by prorating your net tax from your short fiscal year.

Divide the net tax for the first short fiscal year by the number of days that you were registered in that fiscal year. Then multiply this amount by 365.

If the estimated amount is $3,000 or more, and your net tax for the next fiscal year will be $3,000 or more, you will need to make instalment payments in the next year.

If your net tax for the current or previous year is less than $3,000, you do not need to make quarterly instalment payments in the current year. In this case, you need to file your GST/HST return and send us any GST/HST owing once a year.

Example 

You are a sole proprietor. Your first year as an annual filer began on December 12, 2016, and ended on December 31, 2016. Your net tax for those 20 days was $200. To determine if you need to make instalment payments in 2017, prorate your net tax for 2016 as follows:

$200 (net tax) ÷ 20 (days) × 365 = $3,650

Since your prorated 2016 net tax is greater than the $3,000 or more threshold, you will need to make equal quarterly instalment payments in 2017 if your 2017 net tax will also be $3,000. To base your instalment payments on your prorated 2016 net tax, calculate the amount of each payment as follows:

$3,650 ÷ 4 = $912.50

You have two payments due on April 30, 2017, both your net tax of $200 for 2016 and your first instalment for 2017 of $912.50.

When to pay the GST/HST instalments

Instalment payments are due within one month after the end of each of your fiscal quarters. To view your instalment due dates online, use the Instalment payment calculator service at My Business Account or at Represent a client.

When a due date falls on a Saturday, a Sunday, or a public holiday recognized by CRA, we consider your payment to be paid on time if we receive it on the next business day.

Example

You have a December 31 fiscal year-end. Your instalment due dates are as follows:

  Instalment due dates
Fiscal Quarters Instalment due dates
from January 1 to March 31 April 30
from April 1 to June 30 July 31
from July 1 to September 30 October 31
from October 1 to December 31 January 31

Method to pay the GST/HST instalments

To make your GST/HST instalment payments, use Form RC160, Remittance Voucher - Interim Payments.  You still have to make your payment by the due date even if you do not receive your remittance form on time.

When you have completed your calculations and are ready to pay, see Remit (pay) the GST/HST (including instalment payments).

How to report GST/HST instalment payments on your GST/HST return

When you file your GST/HST return at the end of the fiscal year, report the instalment payments you made throughout the year on line 110 of your return.

Generally, if the instalments you paid are less than your net tax, you have to remit the difference. If the instalments you paid are more than your net tax, you can claim the difference as a refund.

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