What penalties does the CRA charge for late filing or late payment?

The CRA imposes penalties for both late filing (failing to submit your T1 Return by the deadline) and late payment (failing to pay your balance owing by 30 April). **Late filing penalty:** - 5% of your balance owing on the return - PLUS 1% of balance owing per month, for up to 12 months - Example: If you owe C$10,000 and file 3 months late, penalty = 5% + 3% = 8% = C$800 **Repeat late filers:** If you have been charged a late-filing penalty in any of the 3 preceding years and received a formal demand to file: - 10% of balance owing - PLUS 2% per month for up to 20 months **Late payment interest:** Interest accrues on any unpaid balance from 30 April (even if you file by the 15 June self-employed deadline). The prescribed interest rate is compounded daily — historically 6–10% per year. **Instalment penalty:** If your required instalment payments were insufficient, interest is charged on the shortfall at the same prescribed rate. **Relief options:** - CRA's **Taxpayer Relief Program** can waive or reduce penalties and interest in cases of serious hardship, natural disasters, or CRA errors - You must apply using Form RC4288

• Late filing: 5% of balance owing + 1% per month for up to 12 months
• Repeat offenders: 10% + 2% per month for up to 20 months
• Interest accrues from 30 April even if you file by 15 June
• No penalty if you have zero balance owing — but file on time anyway
• Taxpayer Relief Program can waive penalties in exceptional circumstances