• Who has to make quarterly payments?
• How to calculate quarterly tax payments
• When to make quarterly payments
• How to pay quarterly instalments
• Payments the CRA doesn't accept
• What if you don't pay your quarterly instalments?
• Do quarterly payments apply to you?
• Tax quarterly payments: FAQ

If you’re a freelancer or an independent contractor, you may have to send quarterly payments to the Canada Revenue Agency (CRA). While the process can initially seem confusing, once you understand who has to pay and how you can pay, the process becomes much more manageable.

Here's everything you need to know about quarterly payments as a freelancer in Canada. 

Who has to make quarterly payments?

If you're a freelancer trying to figure out if you have to pay quarterly tax instalments, there are two factors you can use:

1. Where you live: The province or territory you live in determines how much you owe for tax instalments. As of 2024, if you are in Quebec, you have to pay quarterly instalments if you owe more than $1,000 in taxes. If you live anywhere else in Canada, it's $3,000.
2. Net tax owing: You only have to make quarterly payments if you've owed taxes in at least one of the two previous years.

If you think you might have to pay quarterly taxes, you can also look for a reminder from the CRA, as they send them to people who are likely to have to pay. Reminders are typically sent in February for March and June payments, and in August for September and December payments. 

How to calculate quarterly tax payments

When it comes to how you calculate your quarterly tax payments, you have three options:

1. No-calculation option: If your income, deductions, and credits are consistent from year to year, this is a simple option. Based on your previously assessed tax return, the CRA will calculate your instalment payments and include them in the reminders they send you in February and August.

2. Prior-year option: You might choose this option if you expect your income, deductions, and credit to be similar to the previous year but very different than two years before.

For instance, to estimate your instalment for 2024, you'll use your payments from 2023. You can use the CRA's calculation chart to help you figure out how much you'll owe.

3. Current-year option: Consider this option if your income, deductions, and credits fluctuate from year to year. You'll use information from the current year to estimate your payments. You can use the CRA's calculation chart to help with your calculation

When to make quarterly payments

As a freelancer, your quarterly payments for 2024 are due:

• March 15
• June 15
• September 15
• December 15

If a payment date falls on a weekend or holiday, the payments are due the next business day.

As mentioned, the CRA only sends out two reminders per year — in February and August — but if you think you need to pay and you don’t get a reminder, you should still submit your payment.

Late or insufficient payments may require you to pay interest or penalty charges. 

How to pay quarterly instalments

When you're ready to pay your quarterly income taxes, you have three options:

• Online
• In person
• By mail

The CRA provides several different ways to pay online:

• Online banking: Your bank or credit union might allow you to add the CRA as a payee and schedule your payments.
• CRA online service: You can also use the CRA's "My Payment" option for one-time payments. This option only accepts debit payments; you can't use a credit card.
• Pre-authorized debit (PAD): If you want to schedule one or more payments in the future, you can use PADs to schedule instalment payments five business days in advance.

To pay in person or by mail, you need to bring your instalment remittance voucher (Form INNS3), which comes with your two reminders. You can make in-person payments at your bank, your credit union, or a Canada Post retail location.

If you choose to use a Canada Post location, you need a customized QR code to ensure the payment is applied correctly.

There are also several third-party payment options you can check out on the CRA's website. 

Payments the CRA doesn't accept

Regardless of how you decide to pay, the CRA will never accept the following payments:

• Cryptocurrency
• Gift cards
• Traveller's cheques
• Cash by mail 

What if you don't pay your quarterly instalments?

If you're supposed to make quarterly payments and you don’t — or you pay less than you're supposed to — the CRA may charge penalties and interest. If you make quarterly payments, remember to note them on your annual tax return so you get credit for them. You don’t want to accidentally pay twice.

Do quarterly payments apply to you?

When you're just starting out as a freelancer, there's a lot to learn. Trying to navigate how to file your taxes, pay your GST, and your instalment payments can feel overwhelming.

QuickBooks Online solutions offer many features to help lower the freelancer learning curve. From tracking your income to accepting online payments and more, QuickBooks Online can help you organize and manage your freelance business so you can focus on growing.