Who Has to Pay?
Canadian-controlled private corporations (CCPCs) must pay corporate tax instalments when their total federal and provincial taxes payable exceed $3,000 in the current or prior tax year. Most active small businesses reach this threshold quickly once profitable.
CRA — Instalment Frequency
Depending on the size and situation of your corporation, instalments may be required monthly or quarterly. Instalment due dates are calculated relative to your corporation's fiscal year-end and will vary accordingly.
Because Quebec administers its own corporate tax independently, corporations operating in Quebec remit to both the CRA and Revenu Québec — two separate accounts, two separate schedules — under the same frequency rules.
What Happens If You Miss an Instalment?
Both agencies charge instalment interest on late or insufficient payments. This interest is not tax deductible — the Income Tax Act denies any deduction for interest and penalties on income tax, for corporations and individuals alike. If interest charges are significant, an instalment penalty may also apply on top.
Practical Tips
- → Set aside a portion of revenue each month in a dedicated account to fund instalments — avoid scrambling at each due date
- → Calendar your instalment due dates at the start of each fiscal year
- → If your income drops significantly mid-year, you may be able to reduce your instalment amounts — speak with your CPA before making changes
- → Track your federal and provincial instalments separately — amounts are remitted to two different agencies with their own accounts