As a result of rising interest rates, the interest charged on late or insufficient tax instalments has risen significantly.

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

• You are required to pay by instalments in 2023
• You receive an instalment reminder in 2023 that shows an amount to pay
• You did not make any of your instalment payments, paid late, or paid less than what you had to pay

CRA charges instalment interest on all late or insufficient instalment payments. Instalment interest is compounded daily at the prescribed interest rate, which can change every three months. The current interest rate being charged is 8%.

To determine your instalment requirement, please refer to our letter accompanying your personal income tax return or the final letter accompanying your corporate financial statements. This information can also be found on your My Account for Individuals or My Business Account.

Personal tax instalments are due quarterly March 15th, June 15th, September 15th, and December 15th. Corporation tax instalments are typically due monthly. Interest will also be charged on taxes paid after the due date such as GST remittances, payroll remittances, personal income taxes and corporate income taxes. 

Source: Government of Canada Website