Tracking Client Tax Instalments Across the Whole Firm
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- 8 min
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- SpidNums
Tracking client instalments firm-wide means recording, for every client who pays them, the cadence — quarterly for individuals, monthly or quarterly for corporations — the calculation option in use, and a dated reminder ahead of each due date. Instalment interest compounds daily on late or deficient payments, so instalment tracking is deadline work, not bookkeeping.
Why instalments are the deadlines firms miss most
Instalments get missed because they belong to nobody: the CRA mails reminders to the client, the firm hears about them at year-end, and the interest — compounding daily — has already run. No return is late, so nothing visibly breaks until the assessment.
The cost is quiet: instalment interest, an additional penalty where that interest exceeds $1,000, and a client who reasonably asks why their accountant never mentioned the payments the CRA had been requesting all year.
Who has to pay instalments
Individuals pay instalments where net tax owing exceeds $3,000 — $1,800 for Quebec residents — in the current year and either of the two preceding years. Corporations pay where total tax payable exceeds $3,000 in the current or previous year.
The cadences differ. Personal instalments are quarterly — March 15, June 15, September 15 and December 15, with the next business day applying on weekends and holidays. Corporations pay monthly on the last day of each month, or quarterly where they qualify as eligible small CCPCs with a clean compliance history.
| Filing | Applies to | Filing deadline | Payment | If it is late |
|---|---|---|---|---|
| Personal tax instalments | Individuals whose net tax owing exceeds $3,000 — $1,800 for Quebec residents — in the current year and in either of the two preceding years. | Instalments are due March 15, June 15, September 15 and December 15, with the next business day applying on weekends and holidays. | Not applicable | Instalment interest compounds daily at the prescribed rate on late or deficient instalments. An additional instalment penalty applies where instalment interest exceeds $1,000. |
| Corporate tax instalments | Corporations whose total tax payable exceeds $3,000 in the current or previous year. | Monthly instalments are due the last day of each month. Eligible small CCPCs — claiming the small business deduction, with a perfect compliance history and within the taxable-income and taxable-capital limits — may instead pay quarterly, on the last day of each quarter of the tax year. | Not applicable | Instalment interest applies, with an additional penalty where instalment interest exceeds $1,000. |
The calculation options, and what to advise
Individuals can pay the amounts on the CRA's instalment reminders, or calculate from prior-year or estimated current-year income. Paying the reminder amounts on time protects the client from instalment interest even where income turns out higher — which is why it is the default advice for most.
Calculated options save cash where income is falling, at the cost of interest exposure if the estimate is wrong. The advice is client-specific; what is firm-wide is recording which option each instalment-paying client is on, because that determines what the reminder should say.
Step 1 — Build the firm-wide instalment register
List every client who pays instalments, personal and corporate, with the cadence, the calculation option, and amounts where known. The register is built from last year's assessments and the CRA reminders clients forward — and it is the single view checked before each due date.
Most firms discover the register is longer than expected: incorporated professionals, clients with investment income, and any corporation past its first profitable year. A client missing from the register is the one who calls in May about an interest charge.
Step 2 — Put instalments on a service cadence
Instalment support is recurring work, so run it like recurring work: a service with a quarterly or monthly frequency, assigned to each instalment-paying client, with next-due dates driving the reminders. In SpidNums that is a Services catalogue entry feeding the Reminders deadline groups.
This is the difference between a register and a system. A register is checked when someone remembers; a cadence surfaces the work in Overdue, Due soon and Upcoming without anyone remembering anything.
Step 3 — Remind clients ahead of each date, and record it
A short reminder to the client before each due date — the amount, the date, how to pay — is most of the service. Record that it was sent: where interest is assessed anyway, the dated note proves the firm did its part.
Reminders that reach clients beat reminders that are merely sent. Firms typically send them a week or two ahead, timed around the client's cash cycle, and route them through whatever channel the client actually reads.
Step 4 — Reconcile instalments paid at year-end
At year-end, reconcile what each client actually paid against what the return claims: instalments show on the client's CRA account, and mismatches — missed payments, amounts applied to the wrong account — are cheaper to fix before filing than after assessment.
The reconciliation also feeds next year's register: the new balance determines whether the client stays on instalments, and the year's experience determines whether the no-calculation default is still the right advice.
Frequently asked questions
Who has to pay personal tax instalments in Canada?
Individuals whose net tax owing exceeds $3,000 — $1,800 for Quebec residents — in the current year and in either of the two preceding years. Instalments are due March 15, June 15, September 15 and December 15, with the next business day applying where a date falls on a weekend or public holiday.
When are corporate tax instalments due?
Monthly, on the last day of each month, for corporations whose total tax payable exceeds $3,000 in the current or previous year. Eligible small CCPCs — claiming the small business deduction, with a perfect compliance history and within the taxable-income and taxable-capital limits — may instead pay quarterly, on the last day of each quarter of the tax year.
What happens when a client misses an instalment?
Instalment interest starts compounding daily at the prescribed rate on the late or deficient amount, and an additional instalment penalty applies where that interest exceeds $1,000. There is no late-filing event — nothing visibly breaks — which is exactly why missed instalments surface at assessment time unless the firm is tracking the dates.
Should clients just pay the CRA's reminder amounts?
For most clients on stable or rising income, yes: paying the amounts on the CRA's instalment reminders by each due date protects against instalment interest even where the year ends higher. Clients whose income has dropped can pay less under the prior-year or current-year calculation, accepting interest risk if the estimate proves low. The firm's job is recording which option each client is on.
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