Do self-employed workers in Canada have to pay tax quarterly?

Unlike employees, nobody withholds tax from a freelancer's paycheques. To keep the system fair, the CRA collects tax from self-employed workers during the year in quarterly instalments — roughly the same way an employer deducts tax from every paycheque. Instalments are not an extra tax. They are prepayments of the tax you will owe when you file.

Who has to pay tax in instalments?

You may have to pay instalments if your net tax owing — the amount you owe after subtracting withholdings and refundable credits — is more than $3,000 ($1,800 in Quebec) for the current year and in either of the two previous tax years. For the 2026 tax year, that means instalments are required if your net tax owing is more than $3,000 for 2026 and in either 2025 or 2024.

In practice, the CRA notifies you with an instalment reminder (form INNS1). Two reminders are sent each year:

• A February reminder covering the March and June payments
• An August reminder covering the September and December payments

If you receive a reminder but your net tax owing for the year turns out to be $3,000 or less ($1,800 or less in Quebec), you do not have to pay instalments that year.

When are instalment payments due?

Instalment payments are due four times a year:

• March 15
• June 15
• September 15
• December 15

Farmers and fishers follow a different schedule, with a single instalment due December 31.

Self-employed filers still get their extended tax filing deadline — your return is due June 15 (or the next business day if it falls on a weekend), but any remaining balance owing must be paid by April 30. Instalments simply mean you pay most of that balance ahead of time, in four chunks.

How do you calculate the amount?

The CRA gives you three options to calculate your instalment payments, and you may pick whichever results in the lowest required payments:

1. No-calculation option. Best when your income, deductions, and credits stay about the same year to year. The CRA calculates the amount from your latest assessed return and prints it on your instalment reminders. Pay exactly what the reminder says, on time, and you will not face instalment interest or penalties.
2. Prior-year option. Best when this year's figures will resemble last year's but differ significantly from two years ago. You calculate instalments from your prior-year net tax owing plus any CPP contributions payable and voluntary EI premiums.
3. Current-year option. Best when this year's figures will be significantly different from the last two years. You estimate this year's net tax owing, CPP payable, and voluntary EI premiums, and pay a quarter on each due date. This option is the riskiest: if you underestimate, you can owe instalment interest.

The CRA publishes a calculation chart for instalment payments each year to help with the second and third options.

What happens if you miss an instalment or pay too little?

Instalment interest and possible penalty charges apply if you are required to pay by instalments, receive a reminder, and then do not pay, pay late, or pay less than required.

• Instalment interest is charged on all late or insufficient instalment payments. It is compounded daily at the prescribed interest rate, which the CRA reviews and can change every three months.
• An instalment penalty applies only if your total instalment interest for the year is more than $1,000. The penalty equals half the difference between the interest you were charged and the higher of $1,000 or 25% of the interest that would have applied had you made no instalment payments at all.

In plain terms: interest under $1,000 means interest charges only; interest over $1,000 can bring a penalty on top.

Can you reduce or stop instalment payments?

Yes, if your situation changes. For example, if you received only an August reminder, you can reduce or stop your September and December payments when the amounts you have already paid will cover your estimated net tax owing for the year, or when your net tax owing will be $3,000 or less ($1,800 in Quebec). You do not have to ask permission — but choose an option you can defend, because an estimate that proves too low can trigger instalment interest.