Disclaimer: This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.
Quick Answer
Your third 2026 personal tax instalment is due Tuesday, September 15, 2026. You are required to pay instalments if your net tax owing is more than $3,000 ($1,800 in Quebec) for 2026 and was also over that threshold in either 2025 or 2024. The Canada Revenue Agency (CRA) offers three calculation methods — no-calculation, prior-year, and current-year — and payment can be made through CRA My Payment, pre-authorized debit, online banking, or a Canadian financial institution. Missing the deadline triggers instalment interest under section 161 of the Income Tax Act, and a separate 50% penalty applies once instalment interest exceeds $1,000 in a year.
Why September 15 is on every self-employed Canadian's calendar
Around this time each year, a specific letter lands in the inboxes of freelancers, sole proprietors, and retirees across Ontario: a Canada Revenue Agency instalment reminder. The number on it can feel unwelcome, particularly when cash flow is tight.
The September 15, 2026 deadline is manageable once you understand two things: whether the law actually requires an instalment, and how much you should send. Neither answer is obvious from the CRA letter alone.
This guide walks through the deadline, the three methods CRA allows for calculating what you owe, and the payment options that arrive on time. For a broader view of 2026 deadlines, our Self-Employed Tax Deadline Canada 2026 article gives the full calendar.
Quick start: pick your path
Most Ontarians facing the September 15 instalment belong to one of four groups. Your path through this article depends on which one applies, and on how your tax situation looked in 2025 and 2024.
Payroll may not cover tax on a rental, freelance work, or investments — a reminder often follows.
Sole proprietors, freelancers, and gig workers typically receive reminders because no employer withholds tax. See our guide on sole-proprietor tax deductions.
Personal instalments on salary or dividends plus separate corporate instalments on company income. Two obligations, one September.
Pension income, RRIF withdrawals, and taxable investment income can each trigger an obligation even without an employer.
Who actually has to pay: the two-year test
Many Ontarians receive an instalment reminder in a year when they no longer meet the two-year test. Paying the full suggested amount can tie up cash otherwise needed for rent, payroll, or a corporate expense.
If your 2026 income has dropped significantly because a contract ended, you retired mid-year, or a benefit change reduced your taxable income, you may be able to reduce or skip the September 15 payment using the current-year calculation method covered below. Keep records that support the estimate in case CRA later reviews it.
The federal threshold interacts with the 2026 income tax brackets. Our overview of what the new 2026 tax brackets mean for you explains how those brackets flow into the tax-owing figure the rule tests.
The three ways CRA lets you calculate what to pay
No-calculation option uses the amount the CRA prints on your instalment reminder. It generally protects you from instalment interest as long as you pay the suggested amount in full and on time.
Prior-year option bases each instalment on your 2025 net tax owing, divided across the four due dates. Useful when 2025 is close to 2026.
Current-year option bases each instalment on your best estimate of 2026 net tax owing. Lowest cash outlay when income has dropped, but the highest risk of interest if you underestimate.
| Method | How it works | Best for | Interest risk |
|---|---|---|---|
| No-calculation | Pay CRA's suggested amount from your reminder | Filers whose income is stable or rising | Low |
| Prior-year | One-quarter of 2025 net tax owing per instalment | Filers with 2025 close to 2026 | Medium |
| Current-year | One-quarter of estimated 2026 net tax owing | Filers whose 2026 income has dropped | High if under-estimated |
The current-year method is the most common source of unexpected instalment interest at year-end. If you use it, revisit your estimate before each remaining due date and adjust for any updated income figures.
Sole proprietor vs. incorporated professional: whose instalments are these?
For a fuller comparison of the two structures and their tax obligations, see our article on incorporation versus sole proprietorship.
| Filer type | Instalment return | Due date pattern | Triggering rule |
|---|---|---|---|
| Sole proprietor | Personal T1 | Mar 15, Jun 15, Sept 15, Dec 15 | Net tax owing over $3,000 in 2026 and in 2025 or 2024 |
| Employee with side income | Personal T1 | Same as above | Same two-year test |
| Incorporated pro (personal draws) | Personal T1 | Same as above | Same two-year test |
| Incorporated pro (corporation) | Corporate T2 | Monthly or quarterly by fiscal year | Corporate tax owing over $3,000 |
Confirming which bank account each payment comes from before September 15 avoids last-minute errors when both a personal and a corporate instalment fall in the same week.
Step-by-step: how to pay your September 15 instalment
- 1Confirm the amountUse one of the three CRA methods above. If you are using the no-calculation option, take the figure directly from your instalment reminder. If you are using the current-year option, document your income estimate.
- 2Log in to CRA My AccountOr CRA My Business Account if you also manage a corporate file. Our practical guide to CRA My Business Account walks through the interface.
- 3Choose a payment channelCRA My Payment (Interac Online), pre-authorized debit through My Account, online banking bill payment, in person at a Canadian financial institution, or by mail. Each channel posts on a different timeline.
- 4Submit at least one business day earlyCheques and mail-in payments require additional buffer time. Online banking bill payments are typically credited on the day the receiving institution processes them, not the day you initiate the transfer.
- 5Save the confirmationReconcile it against your CRA instalment ledger the following February, which is when the year's activity is finalized in your account. Any overpayment applies to your next return.
What happens if you miss or underpay
Instalment interest under section 161 of the Income Tax Act begins to accrue the day after each missed or short payment. It compounds daily at the CRA prescribed rate, which is updated quarterly.
A separate 50% penalty under section 161(11) applies only when your total instalment interest for the year exceeds $1,000. This penalty is charged on the interest itself, not on the tax you owe.
You may also earn contra-interest credit for paying an instalment early or for over-paying an earlier instalment. That credit reduces or eliminates interest on a later underpayment in the same year. For a broader view of missed-deadline consequences, see our article on what happens when you miss a tax deadline in Canada.
Common mistakes that cost Ontario taxpayers
Ontario filers most often lose money on instalments in a small set of avoidable ways.
- →Assuming the CRA reminder is a legal invoice and paying it in full even when income has dropped and no obligation exists.
- →Using the no-calculation option after a significant income drop, which typically overpays CRA and reduces cash on hand.
- →Paying by cheque or mailing in a payment a day or two before the deadline, when the received-on-time rule for physical payments has a narrower window.
- →Forgetting that HST instalments are a separate obligation with their own reporting periods.
- →Missing the contra-interest credit by not adjusting later instalments after a small earlier underpayment.
- →Treating personal T1 and corporate T2 instalments as one bill, especially in September when both may land the same week.
Frequently asked questions
What happens if September 15 falls on a weekend or holiday?
When the due date lands on a Saturday, Sunday, or a public holiday recognized by the CRA, your payment is considered on time if it is received the next business day. In 2026, September 15 falls on a Tuesday, so no shift applies.
Do I still have to pay if the CRA reminder shows an amount but my income dropped this year?
No. The reminder is based on prior filings, not on 2026 income. If your 2026 net tax owing will be below $3,000, you generally have no legal obligation to pay the September 15 instalment, though you should keep records of your income estimate.
Can I pay my CRA instalment through online banking?
Yes. Most Canadian financial institutions list CRA personal income tax instalment as a payee. The payment posts on the day the receiving institution processes it, so allow at least one business day before September 15.
What interest rate does CRA charge on late instalments right now?
The CRA prescribed rate on overdue amounts is 7% for the third quarter of 2026 and is updated each quarter on canada.ca. Check the rate before calculating the cost of a late payment.
I'm a salaried employee with a side hustle — do I owe personal instalments too?
You may. The two-year test looks at total net tax owing, not the source of income. If payroll withholding does not cover your side-income tax and the test is met, an instalment obligation typically applies.
What if I already paid too much on the March or June instalment?
Overpayments count as contra-interest credit against later underpayments in the same year. Any remaining excess applies to your 2026 return balance.
Do RRSP contributions or tax credits reduce the amount I owe?
They may. RRSP contributions and non-refundable credits reduce net tax owing, which is the figure the two-year test uses. Adjust your current-year estimate to reflect any planned contributions.
Can I just skip the September 15 instalment and pay everything on April 30?
Technically yes, but interest accrues daily from the missed instalment date until the balance is paid. If your total 2026 instalment interest exceeds $1,000, the 50% penalty may also apply.
Talk to a ClearWealth advisor before the next deadline
Instalments are one of the few tax obligations where planning ahead saves both cash flow and interest. A short conversation before the December 15 deadline can align your current-year estimate, catch any HST or corporate obligations, and confirm the payment channel that fits your schedule. Review your 2026 instalments with an Ontario accountant — or see our tax and advisory services.
Book a ConsultationThis article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.
Sources & References
- ›Canada Revenue Agency — Payment due dates (2026 personal instalments). canada.ca/instalments/due-dates
- ›Canada Revenue Agency — Required tax instalments for individuals. canada.ca/income-tax-instalments
- ›Canada Revenue Agency — Calculating your instalment payments. canada.ca/instalments/calculate
- ›Canada Revenue Agency — Prescribed interest rates, 2026 Q3. canada.ca/prescribed-interest-rates/2026-q3
- ›Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), section 161. laws-lois.justice.gc.ca/i-3.3/section-161
