I had a tax installment of $7956.00 due on March 15th which I missed and paid on April 30th. I can make an extra installment now to cover the penalty, but I don't know how much it should be.

The rules are here, but I find them confusing: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html


The interest rate on overdue income taxes is 5%.

You were approximately six weeks late paying your tax installment. By my calculations, that means you will owe an additional $45.90 in interest charges. That's using the following math: 0.05 * 7956 / 52 * 6

It's possible that interest is calculated from the beginning of the year rather than the due date of your tax installment, in which case your interest would be approximately $132.60. I realise this is all somewhat less than helpful. However, I do not believe the Interest and Penalty Charges document you link to actually imply that you'll be paying a penalty. The interest on your tax installment is not going to be $1000 as far as I can see, and that document states:

We apply this penalty only if your instalment interest charges for 2013 are more than $1,000

(emphasis mine).

Please do not trust the advice given here, though. I'm not a tax lawyer, and, like you, find the information confusing. I would strongly recommend you call the CRA and speak to someone there. I did so earlier this year when I screwed up my tax return. The representative was polite, helpful, and informative. Not at all what I expected.

  • 1
    It was my first installment for 2013, so it wouldn't be back dated to 2012.
    – FigBug
    May 1 '13 at 14:48
  • Ah, of course. Thanks for clarifying. I'll make an edit to my answer. May 1 '13 at 14:53

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.