Owe money to the CRA? Here’s how much interest you could be getting charged
If you missed the deadline to pay what you owe the CRA, you’re probably not alone, but it could be costing you more each day. There are ways to avoid having to pay these additional costs.
For most Canadians who owe money to the CRA, the deadline to pay their balance was Thursday, April 30. As of Friday, May 1, any remaining balance begins to incur additional costs.
“The CRA will charge daily compound interest on any outstanding balance from the day after the balance is due until your balance is paid in full,” reads the website.
That means if you have any outstanding balance, including unpaid amounts from reassessments, it is now accruing daily compound interest.
So, how much more could you owe?
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The CRA regularly adjusts how much interest it charges, with rates reviewed every three months. In its latest update, the agency outlined the rates in effect from April 1 to June 30, 2026.
For Canadians with unpaid income taxes, Canada Pension Plan contributions, and employment insurance premiums, they must pay a seven per cent interest rate, which has remained the same as in the previous quarter. Interest starts accumulating on the amount you owe from the day your payment was due.
If you’re required to pay in instalments, you could be charged interest depending on certain conditions.
For example, if you have to pay in installments in 2026 and you get a reminder that shows how much you must pay, but you miss a payment, pay late, or don’t pay the full amount, an installment interest may kick in. According to the CRA, you could be charged a penalty if your instalment interest for 2026 exceeds $1,000. The longer a balance remains unpaid, the more interest can build.
To avoid having to pay interest charges, make sure to pay the amount due early or pay more than the installment amount required. Doing so could even earn you instalment credit interest, which can go towards any interest charges on insufficient or late payments for the same tax year.
To simplify the process, you can set up pre-authorized payments through your CRA account and calculate how much you owe.