Canadians who missed the April 30 deadline to pay their Canada Revenue Agency balances are now facing daily compound interest charges. As of Friday, May 1, any remaining balance begins to accrue additional costs.
The CRA charges daily compound interest on any outstanding balance from the day after the balance is due until the balance is paid in full. This applies to all unpaid amounts, including those from reassessments.
For most Canadians with unpaid income taxes, Canada Pension Plan contributions, and employment insurance premiums, the interest rate stands at seven per cent. This rate has remained unchanged from the previous quarter and is in effect from April 1 to June 30, 2026.
Taxpayers required to pay in instalments face additional complexity. If you receive a reminder showing how much you must pay but miss a payment, pay late, or don't pay the full amount, installment interest may apply. According to the CRA, you could be charged a penalty if your instalment interest for 2026 exceeds $1,000.
The longer a balance remains unpaid, the more interest accumulates. To avoid interest charges entirely, the CRA recommends paying the amount due early or paying more than the required instalment amount. Doing so could even earn instalment credit interest, which can be applied towards any interest charges on insufficient or late payments for the same tax year.
Taxpayers can simplify the payment process by setting up pre-authorised payments through their CRA account and calculating what they owe.
