Payments to the CRA

Interest and penalties on late or incorrect payments

On this page

• When we apply interest to your debt
• Calculating interest on a balance owing
• Penalties for late or incorrect payments
• Cancelling or waiving penalties and interest
  • Reducing instalment interest and penalties

When we apply interest to your debt

If you do not pay an amount that is due on time, the CRA may apply interest to the amount you owe. Interest is charged on most late personal and business tax payments, including required instalments.

Interest is not applied to debts you may owe because of overpayments of Canada child benefit or personal GST/HST credit.

How interest is charged to different types of amounts owing

• Interest on personal taxes you owe
• Interest on personal instalment payments
• Interest on corporate tax instalment payments
• Understanding corporate tax interest

Calculating interest on a balance owing

Interest begins accumulating on your debt from the day your payment was due.

CRA's interest rates may change each quarter. Look up our quarterly interest rates to calculate interest on a debt.

You can automatically calculate the estimated interest that will accrue on future payments by scheduling a series of pre-authorized payments to pay a debt in My Account or My Business Account.

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Refer to: Pay by scheduled pre-authorized debit withdrawal(s)

Penalties for late or incorrect payments

We may charge a penalty for late payments or certain payments that must be submitted electronically.

Cancelling or waiving penalties and interest

In some extraordinary circumstances, certain penalties and interest amounts may be cancelled or waived.

Cancel or waive penalties and interest at the CRA

Reducing instalment interest and penalties

If you made a late instalment payment, or paid less than the required amount, you may be able to offset interest and penalties by earning credit interest. You can earn credit interest by paying your next instalment payment early, or by overpaying your next instalment.

• Reduce your instalment interest and penalty charges
• Reducing corporate income tax instalment interest and penalties