How Self-Employed Canadians Calculate Quarterly Estimated Tax Payments for 2026

If you're self-employed and expect to owe $3,000 or more in federal and provincial taxes combined for 2026, the CRA may require you to make quarterly estimated tax payments. To calculate your quarterly payments, divide your estimated total tax liability for the year by four, then submit payments on the CRA's required due dates (usually mid-March, mid-June, mid-September, and mid-December). The exact amount depends on your net business income, marginal tax rate, and any tax credits you're eligible for. Use the Self-Employed Tax Estimator to help project your liability and plan your payments accordingly. Not every self-employed person must make quarterly payments. This CRA rule may apply to you if any of these conditions are true: - You owe $3,000 or more in combined federal and provincial taxes in either the current year or either of the previous two years - The CRA has sent you a notice asking you to make installment payments - You are a former salaried employee now running a business with significant net income If you don't receive a notice from the CRA but expect to owe more than $3,000, you may still choose to make quarterly payments voluntarily.

Frequently Asked Questions

Do I have to pay quarterly tax installments if I'm self-employed in Canada?

You must make quarterly installments only if you owe $3,000 or more in combined federal and provincial taxes in the current year or either of the previous two years, or if the CRA sends you a notice requiring them. Many self-employed people choose to pay voluntarily to avoid a large tax bill in April.

What is the penalty for missing a quarterly tax installment payment?

If you miss a required quarterly payment, the CRA charges interest on the late amount from the original due date (currently around 8% annually for individuals). You may also face late payment penalties depending on the amount and circumstances.

Can I use last year's tax bill to calculate this year's quarterly payments?

Yes, using your previous year's actual tax liability is one of three methods the CRA allows. You divide your 2025 tax bill by four to get your quarterly amount. This method is simple but works best if your income is stable.

What if my income changes mid-year and I no longer owe $3,000 in tax?

You can contact the CRA to request an adjustment to or cancellation of your remaining quarterly payments. Call 1-866-864-5667 and explain your changed circumstances. You'll still owe interest on any shortfall from earlier quarters if you underpaid.

How do I make a quarterly tax installment payment in Canada?

You can pay online through CRA My Account, by phone using your credit card, by mail with a payment slip, or through your financial institution's online banking. Visit the CRA website for current payment methods and instructions.

Steps

Estimate your 2026 net business income: Project your expected revenue and subtract estimated deductible business expenses. Build in a buffer for unexpected changes, and account for seasonal swings if your business is seasonal. Be conservative rather than optimistic.
Determine your marginal tax rate: Use the [Marginal Tax Rate Calculator](/tools/marginal-rate-calculator) to find the exact percentage you'll pay on your last dollar of income for your province in 2026. This rate varies by province and income level.
Calculate your estimated total tax liability: Multiply your estimated net income by your marginal tax rate. This gives you a rough total tax amount, though it doesn't account for credits or CPP contributions. Add roughly 10.5% of net income for self-employed CPP if applicable.
Choose your installment calculation method: Decide whether to use current year estimates, last year's actual tax, or a two-year average. Most self-employed people use either Method 1 (current estimate) or Method 2 (previous year) depending on income stability.
Divide by four to get your quarterly amount: Take your calculated total tax liability and divide by four. This is your quarterly installment payment due on March 16, June 15, September 15, and December 15 (or the nearest business day).
Set up automatic payments or calendar reminders: Mark the four CRA due dates on your calendar and set up reminders. Many people arrange automatic transfers through their bank on or before each due date to avoid missing payments and incurring interest.
Review and adjust mid-year if needed: By mid-September, compare your actual income so far against your original projection. If it's significantly higher or lower, contact the CRA to adjust your remaining payments before year-end.