Tax instalments: who has to pay them, and how to calculate them
With no tax withheld at source, self-employed workers pay part of their tax in advance. The $1,800 threshold, the four due dates, the calculation methods and the QPP contribution.
An employee pays income tax with every paycheque, through source deductions. A self-employed worker sees nothing taken off during the year. To avoid having to pay everything at once in the spring, the tax authorities often require tax instalments throughout the year.
Who has to pay them
Both governments apply the same threshold to Quebec residents: $1,800 of net tax owing.
Federally. You must pay instalments to the CRA if your net tax owing exceeds $1,800 for the current year, and it also exceeded that amount in one of the two previous years.
In Quebec. You must pay instalments to Revenu Québec if your estimated net tax exceeds $1,800 for the year, and it also exceeded $1,800 in one of the two previous years. Quebec instalments also cover, where applicable, your contributions to the QPP, the QPIP, the Health Services Fund and the prescription drug insurance plan.
Does this apply to you? Each government normally sends you reminders with suggested amounts.
The four due dates
Instalments are due on the same dates federally and in Quebec:
- March 15
- June 15
- September 15
- December 15
If a due date falls on a Saturday, Sunday or public holiday, a payment made on the next business day is considered on time.
Three ways to calculate the amount
| Method | How | For whom |
|---|---|---|
| No calculation | You pay the amounts shown on the reminders sent by the CRA or Revenu Québec. | If your income is stable. Paid on time, these amounts protect you from interest, even if they turn out to be too low. |
| Prior year | You start from last year's tax, divided by four. | If your income is similar to last year's. |
| Current year | You estimate the current year's tax, divided by four. | If your income drops significantly. Careful: an estimate that is too low leads to interest. |
Interest and penalties
A missing or late instalment bears interest, calculated daily.
- Federally, the CRA only charges interest if it exceeds $25. A penalty is added only if the interest exceeds $1,000. Paying an instalment early or overpaying offsets part of the interest.
- In Quebec, if you pay less than 75% of the required instalment, additional interest of 10% per year is added on the unpaid portion.
Don't forget the QPP
A self-employed worker pays both shares of the Québec Pension Plan contribution: the employee's and the employer's. It is often the surprise of the first year.
2026 parameters, for one share:
| 2026 | |
|---|---|
| Basic exemption | $3,500 |
| Maximum pensionable earnings | $74,600 |
| Base and first additional contribution rate | 6.30% |
| Maximum contribution | $4,479.30 |
| Second additional contribution rate (earnings from $74,600 to $85,000) | 4% |
| Maximum second additional contribution | $416 |
A self-employed worker pays double these amounts. These contributions are included in the calculation of your Quebec instalments.
How much to set aside
A simple habit: with every payment you receive, transfer a percentage to a savings account set aside for taxes. The right percentage depends on your income, your deductions and your family situation: start with an estimate, then adjust it during the year.
In MKronos
The dashboard continuously calculates the amount to set aside for your taxes, based on your net income for the year, and suggests a monthly amount to reach your goal. It is an estimate to guide you, not an official calculation of your instalments.
Official sources
- Canada Revenue Agency: who has to pay instalments
- Canada Revenue Agency: options to calculate instalments
- Canada Revenue Agency: interest and penalty charges on instalments
- Revenu Québec: instalment payments of contributions and premiums
- Revenu Québec: calculating instalment payments
- Revenu Québec: maximum pensionable earnings and QPP contribution rate
This article provides general information, current as of its publication date. It does not replace advice from a professional who knows your situation.
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