Instalments

A provisional tax payment is a tax payment made in advance, in small installments throughout the year, instead of a single large payment at the end. Both individuals and businesses must make these payments when their tax liability exceeds a certain threshold, in order to spread out the cost.

Brief

Tax payments made in advance, throughout the year, rather than in a single payment
For an individual: required if the tax payable exceeds $3,000 ($1,800 for a Quebec resident)
For a company: required on tax amounts exceeding $3,000, often monthly.
They avoid a large surprise bill and spread the expense over the year.
Pour un particulier, quatre échéances dans l'année : 15 mars, 15 juin, 15 septembre et 15 décembre

Why does this matter?

It's a bit like paying your rent monthly rather than all at once for the year: easier to manage. The government requires these advance payments from those with a high tax bill, since no employer withholds tax for them. A corporation generally has to make instalments if its tax payable exceeds $3,000; a qualifying small business (a Canadian-controlled private corporation, meaning a private corporation controlled by Canadians, that claims the small business deduction) can pay quarterly instead of monthly. Forgetting an instalment means being charged interest. Bankeo connects you with a certified accountant/CPA free of charge who calculates the correct amount based on your expected income, and we'll be there to support you every step of the way.

Le déclencheur est le même seuil que pour votre déclaration T1 : un particulier du Québec y est soumis dès que son impôt net dépasse 1 800 $ (3 000 $ au fédéral) dans l'année en cours et dans l'une des deux précédentes; une société le calcule à partir de sa déclaration T2. Exemple : avec 8 000 $ d'impôt annuel prévu, un particulier verse environ 2 000 $ à chacune des quatre dates (15 mars, 15 juin, 15 septembre, 15 décembre). Les modalités de calcul figurent sur le site de l'Agence du revenu du Canada. Anticiper ces versements évite la mauvaise surprise de fin d'année : Bankeo vous présente sans frais le comptable qui les planifie et vous accompagne, toujours.

Frequently asked questions

What exactly is it?

Instead of paying all your taxes in one lump sum at the end of the year, you pay them in installments throughout the year (often four dates for individuals, monthly for companies). At the end, the total is calculated: these advance payments reduce the amount still owed.

Who is responsible for paying deposits?

Individuals (including self-employed individuals) whose tax payable exceeds $3,000 ($1,800 in Quebec) in the current year and in one of the two previous years, as well as most corporations with tax exceeding $3,000.

What happens if I forget them?

The government charges interest, and sometimes a penalty if the delay is significant. Bankeo provides you with a free, verified accountant/CPA who calculates your installments and monitors deadlines, at no cost to you, and we remain by your side throughout the process.