Tax Guide/Filing and paying
Penalties and interest
Updated November 4, 2026
Late-filing penalty
- First time: 5% of the balance owing, plus 1% for each full month late, up to 12 months.
- Repeat: 10% of the balance owing, plus 2% for each full month late, up to 20 months. This can apply if you were penalized in one of the three prior years and received a demand to file.
Interest
The CRA rate on overdue taxes is 7% for the fourth quarter of 2026. The rate is set quarterly and compounds daily. Interest begins the day after the due date and is not deductible.
File on time, even if you cannot pay. The penalty is based on what you owe when late, so filing on time can avoid it completely.