Tax · Gig & freelance
Instalment interest & penalty calculator.
Paid your CRA instalments late, short, or not at all? Estimate the interest and the instalment penalty. To find out whether you must pay instalments at all, use the Income Tax Instalment Calculator.
Interest is compounded daily at the CRA prescribed rate on what was due, less credit interest on what you paid. The charge only applies above $25. A penalty applies only if the charge is over $1,000: half of the excess over the greater of $1,000 and 25% of the interest you would have owed with no payments.
Inputs
Result
Enter the rate, what was due and what you paid, then press Calculate.
How CRA works out instalment interest
CRA computes (A) interest on each instalment payable, from its due date to the balance-due date (30 April of the next year), minus (B) interest on each payment made, from the later of the payment date and 1 January to the same date. The result is your charge if it exceeds $25. Overpaying or paying early creates credit interest that offsets a shortfall in the same year only.
The penalty applies only when the charge exceeds $1,000: (charge minus the greater of $1,000 and 25% of A) divided by 2. CRA's own example: a $2,500 charge with $3,200 of no-payment interest gives ($2,500 − $1,000) ÷ 2 = $750.
Source, verified 29 September 2026: Canada.ca — Interest and penalty charges, required tax instalments for individuals.
Frequently asked questions
Why do I enter the rate myself?
The prescribed rate is set by CRA every quarter. Rather than show a number that may be out of date, this tool asks you to copy the rate from CRA's table.
Can I avoid instalment interest?
CRA's instalments guidance describes the prior-year method as protecting you from instalment interest. Check what it would be with the Income Tax Instalment Calculator.
Estimate only
Applies one annual rate to the whole period (CRA's rate changes quarterly) and a 365-day year, so it will differ slightly from your CRA statement. Does not model Revenu Québec instalments or arrears interest on the balance. Confirm figures in CRA My Account.