Filing late with a balance owing costs 5% of that balance plus 1% for each full month late (up to 12 months), on top of daily-compounded interest. Repeat late filers pay 10% plus 2% per month. If you owe nothing, there's no late-filing penalty at all — but you should still file, because benefits depend on it. Enter your numbers to see the real total, calmly.
Interest runs from May 1 (the day after the April 30 payment deadline), whether or not you've filed.
CRA prescribed rate on overdue tax, compounded daily. It's 7% for 2026 Q3 (Jul–Sep) and resets every quarter.
Estimated penalty + interest
$487
On $5,000 owing — a 8% late-filing penalty plus daily-compounded interest.
Behind for years? The CRA's Voluntary Disclosures Program can waive the penalty and most interest if you come forward before they contact you. It's not as scary as it feels.
Estimate only. Interest actually compounds on the penalty too and the prescribed rate changes every quarter, so a multi-year balance may be a little higher than a single flat rate suggests. If you owe nothing, there's no late-filing penalty — but always file anyway to protect benefits like the GST/HST credit and Canada Child Benefit. Not tax advice — see the Sources below and, if you're behind, talk to the CRA or a Canadian accountant.
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A worked example
Say you owe $5,000 and file 3 months late, with the balance unpaid for about 90 days, at the 2026 Q3 rate of 7%:
That's $487.04 on top of the $5,000. The biggest lever is the penalty — and you avoid it entirely by filing on time, even if you can't pay yet. Filing on time and paying late would leave only the $87.04 of interest.
Sources
Every rate and rule in this calculator is drawn directly from the CRA, verified against the live pages below:
- CRA — Late-filing penalty (personal income tax)
The 5% + 1%/month penalty (max 12 months) and the 10% + 2%/month repeat penalty (max 20 months).
- CRA — Prescribed interest rates, 2026 third quarter
The 7% rate charged on overdue individual income tax for July 1 – September 30, 2026 (compounded daily).
- CRA — Interest and penalties for individuals
How arrears interest starts the day after the payment due date and compounds daily.
Keep going
Behind for a while? Read the shame-free catch-up guide and the Voluntary Disclosures Program, and the full breakdown of CRA penalties and interest. To make sure it never happens again, size your monthly set-aside with the tax set-aside calculator, check your quarterly instalments, and start from the guide to self-employed taxes in Canada.
People also ask
How much is the CRA late-filing penalty?
If you owe a balance and file after the deadline, the penalty is 5% of the balance owing plus 1% of the balance for each full month your return is late, up to 12 months — a maximum of 17%. If the CRA charged you a late-filing penalty in any of the three previous years and sent a demand to file, the repeat penalty is steeper: 10% plus 2% per month, up to 20 months. There is no late-filing penalty if you owe nothing.
How is CRA interest on unpaid taxes calculated?
The CRA charges arrears interest on any unpaid balance starting the day after the payment due date (May 1 for most individuals), compounded daily, at the prescribed rate. The prescribed rate is 7% for the third quarter of 2026 and is reset every calendar quarter, so a balance that sits for a long time can be charged at different rates over its life. Interest also accrues on the penalty itself.
What if I can’t pay but can file on time?
Always file on time even if you can’t pay. Filing on time avoids the late-filing penalty entirely — you’ll still owe arrears interest on the unpaid balance, but that’s far smaller than penalty plus interest together. You can then arrange a payment plan with the CRA for the balance.
I haven’t filed in years — what should I do?
You’re not alone, and it’s fixable. The CRA’s Voluntary Disclosures Program lets you come forward before they contact you; an accepted, unprompted application can waive the late-filing penalties and most of the interest, and protect you from prosecution. The calm move is to gather what you can, estimate the balance here so there are no surprises, and file the oldest years first.
Does filing late affect my benefits?
Yes. Benefits like the GST/HST credit, the Canada Child Benefit, and provincial credits are recalculated from your filed return each year. If you don’t file, those payments can stop — even when you owe nothing. That’s a big reason to file on time even in a year with no balance owing.
A deadline that never sneaks up.
This calculator tells you the damage once. VRITTI keeps a set-aside jar growing and flags every CRA date ahead of time — so a late-filing penalty is something that happens to other people.
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