Side hustlers in Canada have to pay CRA tax instalments when they owe a large balance at tax time two years running. The CRA’s rule for 2026 is that you pay instalments if your net tax owing is more than $3,000 ($1,800 for Quebec residents) in 2026 and was also more than that in either 2025 or 2024 (CRA). Instalments are due March 15, June 15, September 15, and December 15. Because the CRA says income tax cannot be withheld from self-employment income, side hustle profit is the usual trigger.
How much tax to set aside covers what percentage of each payment to save. This guide explains the instalment system itself: who gets reminders, how to calculate payments, and how to pay. It pairs with reporting side hustle income and RRSP season tips for side hustlers.
Who has to pay CRA tax instalments in Canada?
Anyone whose net tax owing passes the threshold in the current year and in one of the two previous years. The CRA’s who has to pay page sets the 2026 test:
| Test | Threshold (outside Quebec) | Threshold (Quebec) |
|---|---|---|
| Net tax owing for 2026 | More than $3,000 | More than $1,800 |
| Net tax owing for 2025 or 2024 | More than $3,000 | More than $1,800 |
Your province or territory of residence on December 31 decides which threshold applies. “Net tax owing” is roughly the tax left to pay after withholding and credits, not your total tax bill, so an employee whose day job withholds the right amount can have a profitable side hustle and still fall below the line. The CRA’s 2026 calculation chart works through the figure line by line.
When are CRA instalments due for side hustlers?
March 15, June 15, September 15, and December 15. If a date falls on a weekend or a public holiday recognized by the CRA, a payment received the next business day is on time (CRA due dates). People whose main income is self-employment from farming or fishing have a single December 31 due date instead.
The CRA mails reminders (form INNS1) twice a year: the February reminder covers the March and June payments, and the August reminder covers September and December. A reminder is not a bill. The CRA says that if your 2026 net tax owing ends up at $3,000 or less ($1,800 in Quebec), you do not have to pay instalments for 2026 even if you received a reminder.
How do you calculate CRA instalment payments?
Pick one of three options on the CRA’s options to calculate page. Each one suits a different income pattern.
| Option | How the amount is set | Best if… |
|---|---|---|
| No-calculation | Pay the amounts printed on your CRA reminders | Income is about the same every year |
| Prior-year | Based on your 2025 net tax owing plus CPP contributions payable | 2026 looks like 2025 but differs from 2024 |
| Current-year | Based on your own estimate of 2026 net tax owing plus CPP | Income is changing a lot, such as a side hustle that shrank |
The CRA works out instalment interest using whichever calculation option results in the least interest (CRA), so paying the amounts on your reminders in full and on time is the simplest way to avoid it. For the prior-year and current-year options, the CRA says it will not charge instalment interest or a penalty if you pay in full by the due dates, unless your estimated amounts are too low. The current-year option is the riskiest for a growing side hustle: if business picks up in the fall and your estimate was low, interest applies.
Illustrative example
These are assumed numbers, not a CRA example. A side hustler expects $6,000 of net tax owing for 2026 and chooses the current-year option, paying it in four equal parts.
- $6,000 ÷ 4 = $1,500 due on each of March 15, June 15, September 15, and December 15.
- If their real 2026 net tax owing turns out to be $7,200, the $1,200 shortfall is due with the return, and the CRA can charge instalment interest because the estimate was too low.
How do you pay CRA instalments?
Online through your bank or the CRA’s online payment options, or in person or by mail with the instalment remittance voucher (form INNS3) included in your reminder package (CRA how to pay).
Step 1: Choose your option
Use the no-calculation amount from your reminder unless your income has changed a lot.
Step 2: Set calendar reminders
Put all four dates in your calendar, a week early.
Step 3: Pay and keep proof
The CRA does not send an immediate receipt. Allow three business days for online payments and ten for cheques or money orders before checking CRA My Account, and keep proof until the payment shows or the instalment summary (form INNS2) arrives in February.
Step 4: Fund it from a tax savings account
Moving a set percentage of each payment into a separate account makes instalments painless. Separating business and personal money shows one setup, and a separate savings bucket at KOHO TODO-AFFILIATE or your bank works for this.
What happens if you miss a CRA instalment?
The CRA charges instalment interest, compounded daily at the prescribed rate (which can change every three months), on late or insufficient payments, and bills it if the charge is more than $25 (CRA interest and penalties).
A penalty applies only if your instalment interest for 2026 is more than $1,000. The CRA takes your actual instalment interest, subtracts the higher of $1,000 or 25% of the interest you would have owed with no payments at all, and divides the result by two. In the CRA’s example, $2,500 of actual interest minus the $1,000 flat amount leaves $1,500, so the penalty is $750.
You can reduce instalment interest by paying your next instalment early or overpaying it, which earns credit interest that offsets charges for the same year.
What mistakes do side hustlers make with CRA instalments?
Most come from treating the reminder as optional or as the final word.
- Ignoring the reminder because “I’ll pay in April.” If you are required to pay instalments, waiting until April can mean instalment interest; paying the reminder amounts on time is the simple fix.
- Using the current-year option and guessing low. If the side hustle is growing, the no-calculation or prior-year option is safer.
- Forgetting CPP. Self-employed CPP contributions are part of the instalment calculation.
- Spending the money. Instalments are much easier from a dedicated tax savings account.
- Not adjusting withholding at the day job. The CRA notes you can reduce instalments by having more tax withheld from other income, such as through Form TD1 for employment or pension income.
How do instalments fit into your side hustle taxes in Canada?
Instalments are prepayments, not an extra tax. They are credited against your balance when you file, and any overpayment is refunded or carried forward. Your total tax still comes from the profit you report on Form T2125. If cash flow is tight, an RRSP contribution can lower the final bill; see RRSP season tips. Tax software such as TurboTax Canada TODO-AFFILIATE asks for instalments paid so they are credited.
This is not tax, legal, or insurance advice.
Which guides sit next to CRA tax instalments?
How much tax to set aside, reporting side hustle income, tax prep before January, and how to get a CRA business number. Gig workers with no withholding can see payout details in the Uber Eats courier review, Instacart shopper review, and Amazon Flex review.
What are the common questions?
Do I have to pay tax instalments on my side hustle?
Only if your net tax owing is more than $3,000 ($1,800 in Quebec) for the current year and was also more than that in one of the two previous years. The CRA sends reminders to people likely to qualify.
When are CRA instalment payments due in 2026?
March 15, June 15, September 15 and December 15. If a date falls on a weekend or public holiday recognized by the CRA, a payment received the next business day is on time.
What if I get an instalment reminder but my income dropped?
The CRA says that if your 2026 net tax owing is $3,000 or less ($1,800 in Quebec), you do not have to pay instalments for 2026 even if you received a reminder. You can also use the current-year option to pay less, but you risk interest if your estimate is too low.
Is there a penalty for missing an instalment?
Instalment interest is charged on late or short payments if it exceeds $25. A separate penalty applies only when your instalment interest for the year is more than $1,000.
Can I pay instalments online?
Yes. The CRA accepts online payments, and you can also pay in person or by mail with the INNS3 remittance voucher. Allow three business days for online payments to appear in My Account.
Which sources support this guide?
The rules, rates, and platform requirements in this guide are checked against these primary sources. Retail price ranges are labelled as ranges to verify locally, and they are not quotes.
- Required tax instalments for individuals — Canada Revenue Agency
- Who has to pay: required tax instalments for individuals — Canada Revenue Agency
- Payment due dates: required tax instalments for individuals — Canada Revenue Agency
- Options to calculate: required tax instalments for individuals — Canada Revenue Agency
- Interest and penalty charges: required tax instalments for individuals — Canada Revenue Agency
- How to pay: required tax instalments for individuals — Canada Revenue Agency
- Calculation chart for instalment payments for 2026 (PDF) — Canada Revenue Agency