Corporate Tax Instalment Calculator (Canada)

What the corporate tax instalments calculator does

The calculator works out what a corporation must pay the Receiver General during the year rather than after it. Enter estimated taxable income for the current year, total taxes payable for the last two filed years and the type of corporation, and it reports the estimated federal tax, whether instalments are required, whether the corporation may remit quarterly, and the payment due under each of the three bases.

Instalments catch out newly profitable corporations more than any other filing obligation. A company files its first return, pays the balance, and only later discovers it should have been remitting through the following year. The interest is not large per month, but it compounds daily and is not deductible.

Who has to remit, and how often

Once total taxes payable exceed $3,000 in both the current and the preceding year, instalments are mandatory. A corporation under that figure in either year pays nothing during the year and settles the balance after the year end.

The default is monthly: twelve payments due on the last day of each month of the tax year. A CCPC that claims the small business deduction, keeps taxable income within the business limit and has a clean compliance record may remit quarterly instead. The calculator applies that test and reports the number of payments it used.

Balance due dates are separate. A CCPC claiming the small business deduction generally has three months after the year end to pay any remaining balance; other corporations have two. The return is due six months after the year end in either case.

The three instalment bases

A corporation may use any of three bases and may switch between them.

The estimate method divides your estimate of current-year tax across the payments. It is cheapest for a business whose profit is falling and riskiest, because a low estimate creates a shortfall and the CRA charges interest from each due date.

The prior-year method divides the total tax actually paid for the preceding year. There is no estimate risk, since the figure is on a filed return. For a growing company it means overpaying during the year and getting the excess back at assessment.

The combined method bases the first payment (the first two, for monthly remitters) on the second preceding year and spreads the rest of the preceding year’s tax over the remaining payments. If the business grew sharply last year, this pushes cash later in the year without interest exposure. The annual total equals the prior-year base; only the timing differs.

The calculator prices all three and shows the payment amount for each, along with the lowest annual total.

A worked example

With the default inputs (a CCPC with $400,000 of taxable income, all within the business limit, $42,000 of tax last year and $27,000 the year before), estimated federal tax is $36,000 and the corporation can remit quarterly. The estimate method gives four payments of $9,000; the prior-year method four of $10,500; the combined method a first payment of $6,750 and three of $11,750. If the $36,000 estimate turned out $6,000 too low, six months at an 8% prescribed rate would cost about $240 of interest.

How the tax estimate is built

Active business income within the available small business limit is taxed at the federal small business rate, and everything above it at the general rate. A corporation that is not a CCPC, or does not claim the small business deduction, is taxed entirely at the general rate.

The available limit is not always the full $500,000. Adjusted aggregate investment income above $50,000 reduces it by $5 for every dollar, until it reaches zero at $150,000. A separate reduction applies as taxable capital employed in Canada rises from $10 million to $50 million. The calculator applies whichever reduction is larger and reports the limit that remains, often the most important number for a CCPC holding a portfolio inside the company.

Provincial and territorial corporate tax is not included. Each province has its own rate and business limit, and Alberta and Quebec administer their own corporate tax. Add the provincial layer separately.

Pricing the interest risk

Enter the prescribed rate the CRA is charging this quarter and the average number of months you expect an instalment to stay short, and the tool multiplies the shortfall against the safe base by that rate and period. If the result is small next to the cash-flow benefit of paying less during the year, the estimate method is defensible. If not, use the prior-year or combined base.

The prescribed rate is an input because the CRA resets it every quarter based on treasury bill yields. Check the current quarter’s rate on the CRA prescribed interest rates page before relying on the interest figure.

A practical routine

Recalculate at the half-year point. By then you know whether the estimate is holding, and you can increase the remaining instalments to close a shortfall before interest builds.

The instalment reminders the CRA mails or posts to My Business Account are generated from past years and take no account of a year in which profit has collapsed or doubled. Treat them as a safe floor, not a forecast.

Overpaying early earns offsetting interest against a later shortfall, so a large first payment can absorb a smaller one later. Where cash is plentiful, paying on the prior-year base from the start is the cheapest protection against an estimate that goes wrong.

Instalments are due on the last day of the month or quarter, and a payment started on the due date through online banking often arrives a business day late, so schedule them early.

All figures are estimates of federal tax based on published CRA rates and the details you enter. They are not tax or accounting advice, and they exclude provincial corporate tax. Confirm your instalment obligation with your accountant or in My Business Account.

About This Tool: Corporate Tax Instalments

Corporate tax instalments: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.