How to calculate your CRA tax instalments

To calculate CRA tax instalments you can use the no-calculation, prior-year or current-year option.

By Promissory.ca Editorial Team Reviewed against official Canadian sources Last updated: 2026-09-16

Start with your instalment reminder

The CRA sends two instalment reminders each year on form INNS1. The February reminder covers the March and June payments, and the August reminder covers the September and December payments. The reminder is the natural starting point because it already shows the CRA's own estimate of what you owe.

If the August reminder does not mention a March or June payment, the CRA gives you three ways to work out your remaining payments. You can use any of them, and you can switch between them if your situation changes during the year.

The four instalment due dates

Whatever method you choose, the payments land on the same quarterly schedule for individuals.

Farmers and fishers use a single due date of December 31 instead of the four dates above.

Option 1: the no-calculation option

With the no-calculation option, you pay the amount shown in box 2 of your instalment reminder. The CRA has already worked out the figure, so there is nothing for you to estimate. This is the easiest route, and it suits people whose income is steady and predictable from one year to the next.

The trade-off is that the CRA's number is based on your past filings. If your income has dropped sharply, the reminder may ask for more than you will actually owe. If your income has jumped, it may ask for less than you need to pay to avoid interest.

Option 2: the prior-year option

With the prior-year option, you pay 75% of your 2025 net tax owing on September 15 and 25% on December 15. This option uses a known figure, your net tax owing from the prior year, rather than a forecast about the current year.

It can suit you if your income is falling. If you expect to owe less in 2026 than you did in 2025, basing your payments on the lower prior-year figure keeps you from overpaying. The 75/25 split means the larger share is due in September and the smaller share in December.

Option 3: the current-year option

With the current-year option, you estimate your 2026 net tax owing and pay instalments based on that estimate. This option gives you the most control, because it reflects what you think you will actually owe for the year.

It can suit you if your income is rising or uneven. The risk is on the other side: an estimate that comes in too low can lead to instalment interest, and in some cases a penalty. If you use this option, revisit your estimate during the year and adjust your payments if your income turns out different from what you expected.

How the three options compare

Each option answers a different question. The no-calculation option asks what the CRA thinks you should pay. The prior-year option asks what you owed last year. The current-year option asks what you expect to owe this year.

• Choose the no-calculation option if your income is stable and you want the least work.
• Choose the prior-year option if your income is falling and you want to avoid overpaying.
• Choose the current-year option if your income is rising or unpredictable and you can estimate it accurately.

You are not locked into one option for the whole year. If your circumstances change, you can recalculate and change what you pay for the remaining due dates.

Working through the numbers

The arithmetic itself is simple once you have the right figure. For the no-calculation option, the amount is printed in box 2 of the reminder, so no calculation is needed. For the prior-year option, start with your prior-year net tax owing and split it 75% for September 15 and 25% for December 15. For the current-year option, estimate your net tax owing for the year, subtract any amounts you have already paid, and divide the remainder across the remaining due dates.

Net tax owing is the figure that matters, not your total income. It is what remains after withholding and most non-refundable credits are applied. If you are unsure how to arrive at your net tax owing, the CRA's instalment pages and a qualified tax professional can help.

Avoiding interest while you calculate

If you pay your instalments in full by the due dates, the CRA will not charge instalment interest or a penalty, unless your estimated instalment amounts are too low. That last point is why the current-year option carries some risk: a low estimate is treated as an underpayment.

A common approach is to pay at least the CRA-calculated amount, then top up later in the year if your income turns out higher than expected. Paying a little more than required can be safer than paying too little, because interest compounds daily on shortfalls.

Keeping records of your instalment payments

Whichever calculation option you use, keep a record of each payment and the date it was credited. The CRA applies payments to the oldest outstanding instalment first, so the order of payments affects how interest is calculated if there is a shortfall. A simple log of dates and amounts makes it easy to check the CRA records against your own.

Review the totals before you file your return. If you paid more than you owed, the extra shows up as a refund or a credit against next year. If you paid too little, you can see the gap early and plan for it rather than discovering it at filing time.

Getting help with the calculation

This guide is general information only, not tax advice. The options, thresholds and due dates can change, and your own situation may involve income types or credits that affect the right answer. Before you settle on a figure, confirm it with the CRA or a qualified tax professional.