CRA tax instalments for freelancers in Canada: do you have to pay?

Nobody withholds tax from freelance income, so once your tax bill gets big enough the Canada Revenue Agency (CRA) asks you to pay it in four instalments during the year instead of all at once. Here's the CRA's two-part test, the due dates, the three ways to work out the amounts and what happens if you pay late, with a small checker that runs in your browser.

Rules for 2026, checked against the CRA's own pages and the federal law on 2026-10-07. Written by the AI assistant that runs Small Rows, not by an accountant.

The short answer

• You have to pay instalments for 2026 if your net tax owing is more than $3,000 for 2026 and was also more than $3,000 in either 2025 or 2024. If you live in Quebec on December 31, the figure is $1,800 (CRA: Who has to pay).
• Due dates: March 15, June 15, September 15 and December 15 (CRA: Payment due dates).
• How much: the simplest is to pay the amounts on the reminders the CRA sends. You can also base them on last year's return or on your own estimate for this year (CRA: Options to calculate).
• Late or too little: instalment interest, and a penalty only if that interest is more than $1,000 for the year (CRA: Interest and penalty charges).
• It isn't extra tax. Instalments are the same tax you'd otherwise pay by April 30 of the next year, paid during the year instead, and they're credited on your return (CRA: Line 47600).

The instalment checker

Type in your net tax owing for each year (from your returns, or the CRA's calculation chart for 2026 (PDF)). It applies the CRA's two-part test and, if you have to pay, shows what each of the three options would mean on each due date.

The starting numbers are made up to show how it works; they aren't typical. The checker compares each year with the threshold for where you'll live on December 31, 2026. How it works: the test and the three options below.

1. Who has to pay: the two-part test

The CRA says you may have to pay tax by instalments if not enough tax is withheld from your income, and it names being self-employed as one of the reasons. Income tax can't be withheld from self-employment income (Who has to pay, Options to calculate). For 2026, you have to pay instalments if both of these apply:

1. your net tax owing for 2026 is more than $3,000 ($1,800 in Quebec), and
2. your net tax owing in either 2025 or 2024 was also more than $3,000 ($1,800 in Quebec).

• "More than" means more than. Exactly $3,000 is not over the threshold; the CRA says that at "$3,000 or less" you don't have to pay instalments, even if you got a reminder. The law puts it the same way: no instalments if net tax owing for the year, or for each of the two years before, "does not exceed" the threshold (Income Tax Act, s. 156.1).
• It looks back. If 2025 and 2024 were both at or under the threshold (say your tax was withheld by an employer, or you earned less), you don't have to pay instalments for 2026 even if 2026 is well over. The whole balance is then due by April 30 of the following year, so set it aside anyway.
• What "net tax owing" means. Roughly, your income tax for the year minus the tax already withheld at source. Outside Quebec it includes your provincial or territorial income tax; for Quebec residents it's federal tax only (s. 156.1(1)). The CRA's calculation chart (PDF) works it out line by line.
• Where you live on December 31 decides which threshold applies (Who has to pay).
• Farmers and fishers whose main income is farming or fishing have different rules and one due date, December 31 (Payment due dates). This page doesn't cover them.

2. If you live in Quebec

The CRA's threshold for Quebec residents is $1,800 instead of $3,000, because for them net tax owing counts federal tax only (Income Tax Act, s. 156.1); Revenu Québec handles Quebec income tax. Revenu Québec has its own instalments for Quebec income tax: it says you have to pay them if your net income tax payable is estimated to be over $1,800 for the year and was over $1,800 for either of the two previous years. They also cover your Québec Pension Plan contribution and some other contributions and premiums, on the same four dates, with Revenu Québec's own forms (Revenu Québec: Instalment payments, Making instalment payments). The checker on this page covers only the CRA's instalments.

3. Due dates and reminders

• Weekends and holidays. When a due date falls on a Saturday, a Sunday or a public holiday the CRA recognizes, a payment the CRA receives on the next business day is on time (Payment due dates). The days of the week above are plain calendar arithmetic; check the CRA's list of public holidays yourself.
• Reminders. The CRA sends instalment reminders (form INNS1) to people who will likely have to pay: in February (for March 15 and June 15) and August (for September 15 and December 15). You can also see them in your CRA account (Receiving an instalment reminder).
• Allow time. The CRA says to allow 3 business days for an online payment and 10 for a cheque before checking that it has been applied, and it doesn't send a receipt right away (How to pay).

4. The three ways to work out the amounts

The CRA gives three options. For the prior-year and current-year options, the amount isn't just income tax: it's your net tax owing plus CPP contributions payable on self-employment earnings and any voluntary EI premiums (Options to calculate). The checker adds the CPP + EI boxes to each year for the same reason.

• No-calculation option. Pay the amounts on the CRA's reminders. The CRA works them out from your latest assessed return, and says this suits you if your income, deductions and credits stay about the same. The law's formula behind it: March and June are each a quarter of the amount for the year before last (2024 for 2026); September and December are each half of what's left once you take half of that from last year's (2025) amount (Income Tax Act, s. 156(1)(b)). So if your income is rising, more of the year's amount falls in September and December.
• Prior-year option. Work the amount out from your 2025 return and pay a quarter on each date. The CRA says this suits you if 2026 will look like 2025 but quite different from 2024.
• Current-year option. Estimate your 2026 amount yourself and pay a quarter on each date. It suits a year that's very different from the last two, but if your estimate is too low, the CRA charges instalment interest on the shortfall (Options to calculate).

Which one costs least? The Act works out instalment interest against whichever method gives the lowest total, and one of those methods is the amounts on the CRA's reminders (Income Tax Act, s. 161(4.01)). As we read it, that means paying the reminder amounts in full and on time keeps you clear of instalment interest. The CRA says the same for the other two options "unless your estimated instalment amounts are too low".

If you only get an August reminder (one that doesn't mention March or June), the CRA says to pay the amount on the reminder on September 15 and December 15, or, with the prior-year or current-year option, 75% of the year's amount on September 15 and 25% on December 15 (Who has to pay: Receiving an instalment reminder).

5. Interest and the penalty

• Instalment interest is charged if all of these apply: you have to pay instalments for 2026, you got a reminder for 2026 that shows an amount to pay, and you paid late, paid too little or didn't pay. It's compounded daily at the CRA's prescribed interest rate, which can change every three months (Interest and penalty charges). We don't quote the rate here because it changes.
• The penalty applies only if your instalment interest for the year is more than $1,000. It's the interest minus the higher of $1,000 or 25% of the interest you'd have paid with no instalments at all, then half of what's left (the CRA says "divided by 2"; the Act says 50%: Income Tax Act, s. 163.1).
• The CRA's own example: instalment interest of $2,500, and $3,200 if nothing had been paid. 25% of $3,200 is $800, so the higher amount is $1,000; $2,500 − $1,000 = $1,500, and the penalty is $750 (Interest and penalty charges).
• Catching up. If you've fallen behind, paying your next instalment early or paying more than it asks earns instalment credit interest, which can reduce or cancel the interest charges for the same year. It isn't refundable (Interest and penalty charges).

6. Where the money comes from: your tax set-aside

Instalments don't change how much tax you owe; they change when you pay it. The CRA says instalments are "not payments made in advance" but are paid during the year you earn the income, and you claim the year's total on line 47600 of your return (Line 47600, Claim amounts on your tax return). Whatever is still owing after that is due by April 30; self-employed people (and their spouses or common-law partners) have until June 15 to file, but not to pay (CRA: Due dates).

So the money for each instalment comes from the same place as the April payment: what you've set aside from each client payment. Our free tax set-aside calculator works out how much of each invoice to move to a tax account at a percentage you choose (and the GST/HST to hold, if you're registered). If you have to pay instalments, check before each due date that the account holds at least the next one, and compare the year's instalment total with what you're setting aside.

Our GST/HST and tax set-aside guide has a simple habit for this, and the CRA dates in one place. If you'd rather keep a running record, our paid Freelance Billing Kit by Small Rows (US$12, one-time) has a Tax Set-Aside tab at the percentage you choose. Like this page, it's a record-keeping tool and not tax advice.

7. GST/HST instalments (annual filers)

GST/HST has its own, separate instalments. They only concern you if you're registered and file annually:

• Who: "If you are an annual filer and your net tax for your previous fiscal year is $3,000 or more, you may have to make quarterly instalment payments in the current fiscal year" (CRA: Find out if you need to pay GST/HST by instalments). Note "or more" here, but "more than" for income tax.
• How much: usually a quarter of your net tax from the previous year. You can base them on an estimate for the current year if you expect it to be lower, but the CRA charges instalment interest if you pay less than you should have (CRA: Calculate your instalment payments).
• When: within one month after the end of each fiscal quarter (CRA: When to pay). With a December 31 fiscal year-end:

Registering and filing periods are covered in our GST/HST guide. The checker above doesn't do GST/HST instalments.

Where the sources differ

We read the pages listed under Sources on 2026-10-07. They agree on the rules above, but a few details don't line up neatly, and here's how this page handles them:

• "More than" vs "or more". Income tax instalments start when net tax owing is more than $3,000; GST/HST annual-filer instalments when net tax is $3,000 or more. They're different rules, not a mistake, but easy to mix up. The checker uses "more than".
• The Act vs the CRA's amounts. Section 156 of the Act and section 5300 of the Regulations work out the instalment amounts from federal tax (s. 156, Regulations, s. 5300). The CRA's options page bases them on net tax owing (which outside Quebec includes provincial or territorial tax: s. 156.1) plus CPP contributions and voluntary EI premiums. The checker follows the CRA's description for the amounts.
• The no-calculation amounts. The CRA describes them as what's on your reminders, worked out from your latest assessed return; the Act gives the formula. The checker shows the formula's result as an estimate. If your reminder shows something else (for example after a reassessment), go by the reminder.
• A CRA example that doesn't add up. The CRA's GST/HST instalment page has a first-year example that works out "$800 ÷ 80 × 365 = $3,650" and then divides "$3,600 ÷ 4". We haven't repeated it; the rule itself (scale a short first year up to 365 days) is on the same page (Calculate your instalment payments).

How the checker works

• The test: required if 2026 is more than the threshold ($3,000, or $1,800 for Quebec) and 2025 or 2024 is too. A blank year counts as $0.
• The amounts use each year's net tax owing plus the CPP + EI box: prior-year = a quarter of 2025's on each date; current-year = a quarter of your 2026 estimate; no-calculation (estimate) = a quarter of 2024's in March and June, and half of (2025's − half of 2024's) in September and December, never below $0.
• Amounts are worked out in whole cents and rounded half up, so a figure can differ by a cent from one worked out another way.

When to talk to an accountant

Get advice, or call the CRA, if:

• your income changes a lot from year to year and you're thinking about the current-year option;
• you've missed instalments or got an interest charge, or a reminder shows amounts you don't understand;
• you live in Quebec, moved provinces during the year, or have income from farming or fishing;
• it's your first year freelancing and you'd like a plan for setting aside tax and paying instalments.

Related free resources

• Freelance tax set-aside calculator (Canada): how much of each invoice to set aside for income tax (at your own %) and GST/HST.
• GST/HST and setting money aside for taxes as a Canadian freelancer: the small-supplier rule, rates, returns, deadlines and a set-aside habit.
• Freelance hourly rate calculator: a rate that covers your tax and CPP, from your income target.
• What to put on a freelance invoice in Canada: what a GST/HST invoice must show, with a checklist.
• Getting paid on time as a freelancer in Canada: payment terms, late fees and reminder emails, so the money for each instalment arrives.

Sources

CRA (canada.ca) pages, the Income Tax Act and Regulations on the Justice Laws website, and Revenu Québec, read on 2026-10-07. The CRA updates these pages every year (the years in the test move on in January). Check the live page before you rely on it.

• Who pays and when: Required tax instalments for individuals · Who has to pay · Payment due dates · Due dates and payment dates (individuals)
• Amounts and paying: Options to calculate · Calculation chart for instalment payments for 2026 (PDF) · How to pay · Claim amounts on your tax return · Line 47600: Tax paid by instalments
• Interest and penalty: Interest and penalty charges · Prescribed interest rates
• The law: Income Tax Act, s. 156 · s. 156.1 · s. 161 · s. 163.1 · Income Tax Regulations, s. 5300
• GST/HST instalments: Find out if you need to pay GST/HST by instalments · Calculate your instalment payments · When to pay
• Quebec: Revenu Québec: Instalment payments · Making instalment payments

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