Just like us, the government likes to be paid throughout the year. This is why we, as businesses and individuals, are required to pay taxes in quarterly instalments and as payroll withholding tax in any given tax year. These quarterly payments and payroll withholding payments effectively estimate what we anticipate we will owe the Canada Revenue Agency (CRA) based on our income projections for the year in progress.
So what happens if there is a discrepancy between the estimated amount and the actual amount owed to the government? How do you calculate the taxes owed to the CRA?