Canada 2025 Late Tax Filing Penalties – CRA Rates, Deadlines & Payment Amounts
Filing late can cost you more than you think.
The CRA late-filing penalty, daily-compounding interest, and even instalment penalties can stack up fast if you miss key dates.
Below is the up-to-date snapshot of rates, deadlines, and payment amounts Canadians need to know for the 2024 tax year filed in 2025.
Late-Filing Penalty Rates In 2025
If you file late and owe tax, the standard penalty is 5% of your balance owing plus 1% per full month late, up to 12 months.
If you were charged a late-filing penalty in any of the prior three years and the CRA issued a demand to file, the repeated-failure penalty jumps to 10% + 2% per month (up to 20 months).
Interest is also charged on both the unpaid tax and the penalty.
Current CRA Interest Rate On Amounts Owing
CRA interest rates are set quarterly. For Q3 2025 (Jul–Sep), the interest on overdue taxes is 7%, compounded daily.
Rates can change each quarter, so always check the latest CRA update if you’re paying later in the year.
Instalment Interest & Penalty Triggers
If you’re required to pay instalments and you underpay or pay late, instalment interest applies.
An instalment penalty may also be charged, but only when your instalment interest for 2025 exceeds $1,000.
The penalty is calculated using CRA’s formula that compares your actual instalment interest to 25% of the interest you would have paid with no instalments, then divides the difference by two.
What You’ll Owe: Quick Reference
| Topic | 2025 Rule/Amount | What To Know |
|---|---|---|
| Filing deadline (most individuals) | Apr 30, 2025 | File and pay any balance owing by this date. |
| Filing deadline (self-employed) | Jun 16, 2025 | Date extended because Jun 15 was a Sunday; payment still due Apr 30. |
| Standard late-filing penalty | 5% + 1%/month (max 12 months) | Applies only if you owe. Interest also applies. |
| Repeated-failure penalty | 10% + 2%/month (max 20 months) | If penalized in past 3 yrs and CRA demanded a return. |
| Interest on overdue amounts (Q3 2025) | 7% (daily compounding) | Quarterly rate; can change later in 2025. |
| 2025 instalment due dates | Mar 15, Jun 15, Sep 15, Dec 15 | Pay on time to avoid instalment interest/penalty. |
| Instalment penalty threshold | > $1,000 in instalment interest | Only when interest exceeds $1,000 for the year. |
Example: Estimating Your Penalty
Say your balance owing is $5,000 and you file 4 full months late with no prior penalties:
- Late-filing penalty: 5% of $5,000 = $250, plus 1% × 4 months = $200 → $450 total penalty.
- Interest: Added on the unpaid tax and on the penalty, at the applicable CRA rate (e.g., 7% in Q3 2025), compounded daily until paid.
How To Reduce Penalties And Interest
- File as soon as possible even if you cannot pay in full—this stops the monthly penalty clock.
- Set up a payment arrangement with the CRA if you need time to pay—this helps control interest growth.
- Make instalments on time if you’re required; keep amounts accurate to avoid instalment interest/penalties.
In 2025, the cost of filing late can escalate quickly: 5% + monthly penalties, daily-compounding interest (e.g., 7% in Q3 2025), and potential instalment penalties if you underpay during the year.
Mark the key dates—April 30 for payment, June 16 for self-employed filing—and file as early as possible.
If you can’t pay in full, file anyway and work out a payment plan to keep charges to a minimum.
