CRA Late-Filing Penalty & Interest Calculator
The 2025 Canadian tax return is due April 30, 2026. This tool estimates your late-filing penalty (ITA s.162) and CRA arrears interest if you miss the deadline — and shows you what to do if you can't pay in time. Pick the return year and filer type; the deadlines and the quarterly prescribed rate follow automatically.
Still need to file? See our April 30 countdown & 5-step filing checklist and 12-item deduction sweep — built for the final-days crunch.
Your situation
Tax still unpaid at the balance-due day. Enter 0 if you're owed a refund.
Sets both deadlines: pay by April 30, 2026, file by April 30, 2026.
Self-employment moves the filing date only. Interest still runs from April 30.
Tick only if BOTH are true: CRA sent you a formal demand to file for this year, and a late-filing penalty was already assessed for any of the three preceding tax years. A late return on its own does not trigger it.
Late-filing penalty + arrears interest apply
File as soon as you can, even if you can't pay. The 5% + 1%/month penalty grows with every complete month until you file (capped at 12 months); filing stops that clock immediately. Interest keeps compounding daily on both the balance and the penalty until the account is paid.
Late-filing penalty
$4505% + 4 × 1% of $5,000
Arrears interest
$142134 days, compounded daily
Total to pay
$5,592incl. $5,000 balance owing
Itemized breakdown
| Balance owing at April 30, 2026 | $5,000 |
| Return filed 4 complete months late | Late |
| Flat penalty — 5% of $5,000 | $250 |
| Monthly penalty — 4 × 1% | $200 |
| Interest on the balance — 134 days from April 30, 2026 | $130 |
| Interest on the penalty — 134 days from April 30, 2026 | $12 |
| Total | $5,592 |
The penalty is charged on the tax still unpaid when the return was due to be filed (ITA s.162(1)). Interest on the balance runs from the balance-due day under s.161(1); interest on the penalty runs from the filing due date under s.161(11)(a). Both compound daily.
Interest quarter by quarter
CRA resets the prescribed rate every calendar quarter, so a balance outstanding across a quarter boundary is charged at both rates. See the full quarterly rate history.
Decision guide — what to do next
If you're owed a refund: No penalty, no interest. File at your own pace (but file within 10 years to avoid losing the refund, and file to keep receiving GST/HST credit, CCB, CWB).
If you owe and can pay: File and pay by April 30. Pay online through CRA My Account, online banking, or Interac e-Transfer to pay.cra.
If you owe but can't pay in full: File anyway. Filing on time with zero payment is always cheaper than filing late. Then arrange a payment plan through CRA's payment arrangement tool. Interest keeps running at the prescribed rate (7% in Q4 2026) but there is no late-filing penalty.
If you're self-employed: Payment is due April 30, 2026, filing is due June 15, 2026. Interest starts the day after the balance-due day on any unpaid balance, but no late-filing penalty applies until the June filing deadline passes — and clearing the balance before that date removes the penalty base entirely.
Already received a CRA demand to file (s.162(2))? Penalty doubles to 10% + 2%/month, capped at 20 months. File immediately — every month costs 2% of balance.
How the penalty + interest stack
Late-filing penalty (s.162(1)) — 5% of the tax payable "that was unpaid when the return was required to be filed", plus 1% of that same amount for each complete month between the filing due date and the day you file, up to 12 months (max total 17%). Two consequences people miss: a partial month adds nothing, so the 5% charged on day one is the expensive part; and if the balance is already paid off by the filing deadline there is no base for the percentage to apply to, so the penalty is nil however late the return is.
Repeated failure (s.162(2)) — 10% + 2%/month, capped at 20 months (max 50%). It needs all three conditions: the return is late, CRA sent a formal demand to file under s.150(2), and a late-filing penalty was already payable for any of the three preceding tax years. A second late return on its own does not trigger it.
Arrears interest (s.161(1)) — Compounds daily (s.248(11)) at the CRA prescribed overdue-tax rate from the day after the balance-due day until the balance is paid. That rate is 7% for Q4 2026 — the 3% base rate plus a 4-percentage-point surcharge — and CRA resets it every calendar quarter, so a balance carried across a quarter boundary is charged at both rates. The calculator splits the interest quarter by quarter using the published quarterly rate history rather than one flat figure. Arrears interest is not deductible on a personal return.
Interest on the penalty (s.161(11)(a)) — the late-filing penalty carries interest of its own, and it runs "from the day on or before which the return … was required to be filed" — the filing due date, not the balance-due day. For a self-employed filer those are six weeks apart: the balance's clock starts April 30, 2026 while the penalty's starts June 15, 2026. The breakdown above itemizes the two separately.
Penalty + interest by balance owing (filed 3 months late)
First-offence late-filing penalty (5% + 1%/month = 8% at 3 complete months) plus daily-compounded arrears interest at the published quarterly rates, for a 2025 return filed and paid on August 1, 2026 — about 3 months past the April 30, 2026 deadline.
| Balance owing | Late-filing penalty | Arrears interest | Total to pay |
|---|---|---|---|
| $1,000 | $80 | $19 | $1,099 |
| $5,000 | $400 | $97 | $5,497 |
| $10,000 | $800 | $194 | $10,994 |
| $25,000 | $2,000 | $486 | $27,486 |
The penalty grows 1% per full month (max 12 months); interest keeps compounding daily until paid. Filing on time — even without paying — removes the penalty entirely and leaves only interest.
Frequently asked questions
What is the CRA late-filing penalty for 2025 tax returns?
Under ITA s.162(1), the CRA charges 5% of your balance owing plus 1% of the balance for each full month your return is late, up to 12 months. Repeat late-filers (who received a CRA demand to file in the prior 3 years) face 10% + 2% per month, capped at 20 months. The penalty only applies when there is a balance owing — if you are owed a refund, there is no penalty.
Does a partial month count towards the 1% late-filing penalty?
No. ITA s.162(1) charges 1% for each COMPLETE month between the filing due date and the day you file, so a return two weeks late attracts the 5% flat component and no monthly component. The 5% applies as soon as the return is a single day late, which is why the first day of lateness is by far the most expensive one.
How much interest does CRA charge on overdue taxes?
The CRA prescribed interest rate on overdue taxes is 7% per year for Q4 2026, compounded daily on both the balance and any assessed penalty. It is the average three-month T-bill yield rounded up (the 3% base rate) plus 4 percentage points, and CRA resets it every calendar quarter — so a balance outstanding across a quarter boundary is charged at both rates. Interest starts the day after the April 30, 2026 balance-due day and runs until the account is paid in full.
Can't pay by April 30, 2026 — should I file late?
No. File on time even if you can't pay. Filing late triggers a 5% + 1%/month penalty on the balance owing — much more than interest alone. After filing you can arrange a payment plan with CRA through My Account. Interest keeps accruing at the prescribed rate (7% in Q4 2026) until paid, but the late-filing penalty stops the moment you file.
I'm self-employed. When is my deadline?
Self-employed filers (and their spouses / common-law partners) have until June 15, 2026 to FILE the 2025 return, but any balance owing must still be PAID by April 30, 2026. Filing after the balance-due day but before the June filing deadline with an unpaid balance triggers arrears interest and no late-filing penalty — and if you clear the balance before the filing deadline there is nothing left for the s.162 penalty to apply to at all.
What if I'm getting a refund and file late?
No penalty or interest applies when CRA owes you money. However, don't wait indefinitely — refunds generally expire after 10 years, and filing is also how you claim GST/HST credit, Canada Child Benefit, CWB and other benefits that require an up-to-date return.
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