An instalment payment is a partial payment of the total amount of tax payable for the year.  Instalments are not paid in advance; they are paid during the calendar year in which you are earning the taxable income.

 Personal Tax Instalments

Not every person is subject to paying by instalments. If you have net tax owing that is more than $3,000 in your upcoming tax return, and in either of your previous two tax returns, then you have to pay your income tax by instalments.

These quarterly payments are due March 15, June 15, September 15, and December 15 prior to the income tax deadline date of April 30.

Corporate Tax Instalments

Generally, corporations have to pay their taxes in instalments. The Income Tax Act requires corporations to make instalment payments so that they are treated the same as taxpayers who have tax deducted from their income at source. In a similar manner as an individual, if the entity’s net tax owing is more than $3,000 in its upcoming tax return, and in either of its previous two tax returns, then it has to pay its income tax by instalments.

Corporations however, can pay instalments either monthly or quarterly. The due dates are dependent on the start and end of the fiscal year.

As an example,

If start of the tax year is January 1:

• first monthly payment is due by January 32 and so on
• first quarterly payment is due by March 32 and so on

If start of the tax year is April 1:

• first monthly payment is April 30, and so on
• first quarterly payment is June 30, and so on