Taxation and Taxes
Late-Payment tax penalties in Quebec: The schedule and timeline for avoiding them
July 23, 2026
At a Glance. Filing a late tax return with a balance due costs 5% of the balance plus 1% for each full month of delay (up to a maximum of 12 months), whether with the CRA or Revenu Québec: the total penalty can therefore reach 17% on each side, before interest. Interest, compounded daily at the prescribed rate, begins accruing the day after the due date. Late GST/QST and source deductions remittances are subject to graduated penalties that rise to 15% with Revenu Québec. The solution involves two steps: filing on time even if you cannot pay, and following the detailed tax calendar provided below.
In Quebec, every late tax payment is paid twice: once to the Canada Revenue Agency (CRA) and once to Revenu Québec. Both agencies apply fixed, publicly available, and automatic penalty schedules, to which daily compound interest is added. The good news: these schedules are known in advance, and simply sticking to a well-maintained timeline is enough to avoid almost all of them. This 2026 guide lays out the numbers, from late filing penalties to GST/QST and source deductions, and provides the complete schedule of deadlines. It complements our Checklist for the 2026 Tax Season in Quebec.
The penalty for late filing is the best known and most costly. It applies whenever a tax return is filed after the deadline with an unpaid tax balance. The calculation is the same for both brackets:
This schedule applies to both individuals (T1 at the federal level, TP1 in Quebec) and corporations (T2 at the federal level, CO-17 in Quebec). Real-life example: A corporation that files its returns six months late with a balance of $10,000 at each tier pays a $1,100 penalty to the CRA ($500 plus $600) and $1,100 to Revenu Québec, for a total of $2,200, before even the first dollar of interest is due.
In the case of repeat offences, the federal government is cracking down: if the CRA has already imposed this penalty on you in any of the previous three years and has formally demanded that you file a return, the penalty increases to 10% of the balance plus 2% per full month, up to 20 months. The maximum penalty is 50% of the outstanding balance.
| Delinquent Status | CRA (Federal) | Revenu Québec |
|---|---|---|
| Late tax return with a balance due (T1, T2 / TP1, CO-17) | 5% of the balance + 1% per full month (up to 12 months) | 5% of the balance + 1% per full month (up to 12 months) |
| Repeat Offence (penalty already imposed within the previous 3 years, following a formal request) | 10% of the balance + 2% per month (up to 20 months) | Additional penalties may apply depending on the case |
| Late GST/QST Payments (administered by Revenu Québec in Quebec) | Administration Delegated to Revenu Québec | 7% (1 to 7 days), 11% (8 to 14 days), 15% (15 days or more) |
| Late Payment of Source Deductions (DAS) | 3% (1 to 3 days), 5% (4 or 5 days), 7% (6 or 7 days), 10% (8 days or more) | 7% (1 to 7 days), 11% (8 to 14 days), 15% (15 days or more) |
| Interest on Any Outstanding Balance | Prescribed rate plus a surcharge, compounded daily, revised quarterly | Prescribed rate, compounded daily, plus an additional 10% interest per year on insufficient instalment payments |
Many business owners delay filing their tax returns because they don’t have the cash on hand to pay the balance. That’s exactly the wrong thing to do. The penalty of 5% plus 1% per month is imposed for Late filing, not late payment. If you file on time but pay later, you only owe interest on the balance.
Always file your tax return by the deadline, even if you don’t have a single dollar to your name. On a balance of $10,000, filing on time and paying 6 months later costs a few hundred dollars in interest; filing six months late costs a $1,100 penalty per agency, in addition to the same interest. The CRA and Revenu Québec also accept instalment payment plans when good faith is demonstrated.
In Quebec, Revenu Québec administers both the 5% GST and the 9.975% QST. A late payment is subject to a penalty that increases based on the number of days late: 7% of the amount due for 1 to 7 days, 11% for 8 to 14 days, 15% for 15 days or more. There is no grace period: a payment sent just one day late already costs 7%. Our GST/QST Guide for Businesses in Quebec provides details on registration, rates, and filing deadlines.
Source deductions (DAS) on your employees’ paychecks follow the same logic, with a schedule specific to each jurisdiction:
Almost all of the penalties listed above can be avoided with a single tool: an up-to-date calendar of due dates, with reminders one to two weeks before each date. Here are the key dates for a Quebec business in 2026.
| Deadline: 2026 | Who Is Affected | What to File or Pay |
|---|---|---|
| On the 15th of each month | Employers (on a regular monthly basis) | Submission of the Previous Month’s source deductions to the CRA and Revenu Québec |
| Last day of February | Employers and Payers | T4, T5, RL-1, and summaries for both tax authorities |
| March 15, June 15, September 15, December 15 | Individuals Subject to Estimated Tax Payments | Federal and Quebec tax instalments (threshold of $1,800 in net tax at each income bracket for Quebec residents) |
| April 30 | All Individuals | Filing the T1 and TP1 forms and paying the balance (including the balance for self-employed individuals) |
| June 15 | Self-Employed Individuals and Their Spouses | Filing the T1 and TP1 (balance still due as of April 30) |
| 1 month after the end of the period | Monthly or Quarterly GST/QST Registrants | Tax Return and Payment of the Net Amount |
| 3 months after the end of the fiscal year | Annual GST/QST filers (corporations) | Tax Return and Payment of the Net Amount |
| 2 months after the end of the fiscal year | Corporations (T2 and CO-17) | Payment of the tax balance (3 months at the federal level for certain eligible small CCPCs) |
| 6 months after the end of the fiscal year | Corporations (T2 and CO-17) | Filing Federal and Quebec Tax Returns |
There are two pitfalls that come up time and again. First, the June 15 deadline for self-employed individuals: while the tax return can wait until June, the balance was due on April 30, and interest accrues in the meantime. Second, corporate tax returns: companies have 6 months to file, but only 2 months to pay; a company that waits until its filing deadline to pay accumulates 4 months of compound interest.
Prevention relies on simple habits that your accountant puts in place at the start of the engagement:
And if a penalty is imposed despite everything, it is not always final. The CRA has Relief measures for taxpayers : Upon request, it may waive penalties and interest for a period of up to 10 calendar years retroactively in cases of exceptional circumstances (serious illness, disaster, administrative error, or serious financial difficulties). Revenu Québec offers an equivalent mechanism for Request for Cancellation or Waiver penalties and interest. Finally, the voluntary disclosure programs offered by both tax authorities allow you to regularize unreported tax years with more lenient treatment, provided you take action before the tax authority contacts you.
The most cost-effective option remains: delegating. Hiring an accountant to handle your tax deadlines often costs less than a single year’s worth of penalties: the median fee is approximately $3,000 per year, with most engagements ranging from $500 to $6,000 depending on the industry. Based on actual fees from 1,248 engagements completed through Bankeo (2024-2026), out of more than 15,000 requests received; the Bankeo Fee Barometer provides a breakdown of these prices by service. You can also browse the Vetted accountants in the Bankeo network to compare.
Bankeo connects you for free with vetted accountants from its network of over 1,500 partners, including CPAs who are members of the Ordre des CPA du Québec. Tax returns, GST/QST remittances, source deductions, and on-time estimated tax payments all year round: we’re here to support you, always. Free service, response within 48 hours, no obligation.
Find my accountantIf you have an unpaid tax balance, the penalty is 5% of the balance plus 1% for each full month of delay, up to 12 months, and it applies separately to the CRA and Revenu Québec: up to 17% for each. In the event of a repeat offence following a formal notice from the federal government, the penalty increases to 10% plus 2% per month, up to 20 months. If there is no tax owed, there is no filing penalty, but filing remains mandatory.
You can completely avoid the late filing penalty: only interest accrues on the unpaid balance, compounded daily at the rate prescribed by each tax authority. That’s why you should always file by the deadline, even if you don’t have the cash on hand. The CRA and Revenu Québec then accept instalment payment plans, which limit the damage to predictable interest charges.
Revenu Québec, which administers the GST and QST in Quebec, applies a graduated penalty schedule: 7% of the amount for 1 to 7 days late, 11% for 8 to 14 days, and 15% for 15 days or more. For federal source deductions, the CRA applies a 3% penalty for 1 to 3 days, 5% for 4 or 5 days, 7% for 6 or 7 days, and 10% for 8 days or more, with a possible 20% penalty in the event of a second willful omission in the same year.
For individuals: filing and payment by April 30; filing by June 15 for self-employed individuals (balance due by April 30 regardless). For corporations: payment of the balance two months after the end of the fiscal year; filing of the T2 and CO-17 forms within six months. Source deductions are filed on the 15th of the following month on a regular basis; GST/QST returns are filed one month after the reporting period (three months for annual filers); and individual estimated tax payments are due on March 15, June 15, September 15, and December 15.
Yes, in certain cases. The CRA may waive penalties and interest under taxpayer relief provisions, covering a period of up to 10 calendar years, in the event of exceptional circumstances such as a serious illness, a disaster, an error by the agency, or serious financial difficulties. Revenu Québec handles similar requests for cancellation or waiver. Voluntary disclosure programs also allow you to bring unreported tax years into compliance before the tax authority contacts you.
Expect a median of about $3,000 per year, with most engagements ranging from $500 to $6,000 depending on the sector and the scope of services. Based on actual fees from 1,248 assignments completed through Bankeo (2024-2026), out of more than 15,000 requests received. The Bankeo Fee Barometer details these ranges by service. Based on just one late filing penalty avoided on a balance of $10,000, the service often pays for itself.
General information provided for informational purposes only, based on known 2026 tax rules. It is not a substitute for the advice of a Chartered Professional Accountant (CPA): always consult a professional regarding your specific situation.
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