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Do You Have to Pay Tax by Instalments?

Marin Perez
Managing tax payments

If you're self-employed, you may receive wages that don't have taxes withheld. You may have to pay tax by instalments to make up for it. Let's go over what you should know about paying tax by instalments.

Who has to pay tax instalments?

Most people who receive wages without tax withheld have to pay tax by instalment. This includes the self-employed, those who receive rental or investment income, income from more than one job and even some who get pension payments. Keep in mind, this applies to people who do not have enough tax withheld for more than one year.

How to figure out if I have to pay tax by instalments?

You must first know your:

  • Net tax owing
  • Province or territory of residence.

To determine your net tax owed, calculate what you owe using this chart. Pay tax by instalments if the following two factors apply:

  • Net tax owed for 2018 will be above the threshold for your province or territority
  • Your net tax for 2016 or 2017 were above that threshold for your territory or provice

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Automatic, accurate mileage reports.

You don't have to pay tax by instalment if your owing for 2018 is $3,000 or less. This applies if your net tax owing is $1,800 or less for residents of Quebec. There are some specific requirements if your income comes from fishing or farming, so consult your tax professional before making any decisions.

When are tax instalments due?

Your instalment due dates are:

  • March 15
  • June 15/li>
  • September 15
  • December 15.

Does the CRA send you instalment payment reminders?

The CRA will send instalment reminders to certain taxpayers. It will send out instalment reminders in:

  • February for the March and June payments
  • August for September and December payments

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