Do I have to pay my HST every 3 months? CRA Instalments HST

I used to work at CRA in the HST world, so I get asked HST questions ALL the time. Most often, it's from clients asking if they need to pay their HST every 3 months throughout the year. The answer is "it depends." If you owed CRA $3K or more the previous year, AND if you think you'll owe $3K or more in the current year.

What are HST instalments?

HST instalments are prepayments of the HST you expect to owe for the year. Instead of paying one lump sum when you file your annual HST return, you make four payments during the year, then settle the difference when you file.

For annual filers, these quarterly instalments are generally:

One quarter (1/4) of your HST you owed last year.

When do you have to pay HST instalments?

You have to make quarterly instalment payments if:

- your HST (net tax) for the previous year was $3,000 or more, and

- your net HST for the current year will also be $3,000 or more.

If your net tax for either the current year or the previous year is less than $3,000, you do not have to make instalments. You simply file your annual return and pay the balance once a year.

How much do you pay each quarter?

For most businesses that file HST annually, each instalment is:

> ¼ of last year’s net HST owing

In CRA’s words, the quarterly payments are “usually equal to one quarter of your net tax from the previous year.”

You can choose to base instalments on your estimate for the current year if you expect to owe less HST than last year. But if you pay too little, CRA can charge instalment interest on the shortfall.

Example: A simple HST instalment scenario

Assume your corporation has a December 31 year‑end and files HST annually.

- Two years ago, your net HST was $1,000 (under the $3,000 threshold)

- Last year, your net HST was $4,000 (over $3,000)

- You know that this year your net HST will be more than $3,000

Because both last year’s and this year’s net HST are at least $3,000, you now have to pay "quarterly instalments."

Using last year’s net HST of $4,000 as the instalment base, your instalments for the current year would typically be:

- $4,000 ÷ 4 = $1,000 per quarter

When are HST instalments due?

For annual filers, instalment payments are due within one month after the end of each fiscal quarter.

If your year‑end is December 31, your instalment due dates typically look like:

- April 30 – for January 1 to March 31

- July 31 – for April 1 to June 30

- October 31 – for July 1 to September 30

- January 31 – for October 1 to December 31

You still file one HST return for the year. When you file, you:

- calculate your actual net HST for the year

- subtract the instalments you paid

- pay any balance owing or receive a refund if you overpaid.

What happens if you don’t pay enough?

If you:

- don’t make instalments when required, or

- make instalments that are too low,

CRA can charge instalment interest on the difference between what you should have paid and what you actually paid. This interest is on top of any regular interest on late payments.

How to keep HST instalments simple

A few practical tips for business owners:

- Watch your net HST each year. Once it reaches around $3,000 or more, expect instalments the following year if you stay at that level.

- Use last year’s number as a baseline. That’s usually what CRA will base your quarterly instalments on.

- Adjust for growth. If your sales are growing quickly, plan for higher HST and consider paying a bit extra to avoid interest.

- Automate payments. Set reminders or automatic payments so instalments go out on time.

If you’re unsure whether your corporation should be paying HST instalments, or how much to pay, we can review your HST filings and help you set up a simple payment plan that avoids surprises at year‑end.

Sources

1. [GST/HST Reporter Commentary : Payment of Instalments]

2. [GST/HST Reporter Commentary : Filing Requirements]

3. [GST/HST Reporter Commentary : Instalment Payments]

4. [RC4022 — General Information for GST/HST Registrants]

5. [11601-3, 11695-8 — GST Quarterly instalments]

Additional References

1. [Excise Tax Act — 237. — Instalments]

2. [Excise Tax Act — 280. — Interest]

3. [Excise Tax Act — 211.18. — Return]

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If you need tax advice, speaking with a qualified CPA in Ottawa.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194

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