Canada Revenue Agency
www.cra.gc.ca
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No-calculation option
This option is best for you if your income, deductions, and credits stay about the same from year to year.
We will provide the no-calculation option amounts on the instalment reminders that we will send you in February and August 2012. If you choose this option, just pay the amounts shown on the reminders by each due date.
We calculate the amount of your instalments as follows:
- We base your instalments for March 15 and June 15, 2012, on tax information from your assessed income tax and benefit return for 2010. Each of these two instalments is equal to one-quarter of your 2010 net tax owing, any Canada Pension Plan (CPP) contributions payable for 2010, and any voluntary Employment Insurance (EI) premiums for 2010.
- For your September 15 and December 15, 2012, instalments, we subtract the total amount of your March and June 2012 instalment reminders from your 2011 net tax owing, any CPP contributions contributions payable for 2011, and any voluntary EI premiums payable for 2011. We then divide the remaining amount equally between your September and December 2012 instalments.
If you use the no-calculation option and make the payments shown on the reminders by their 2012 due dates, we will not charge instalment interest or a penalty, even if the total of the payments is less than the total amount of tax you owe for 2012.
Example
Jake is self-employed and has to make instalment payments in 2012. His income increased slightly over the last two years, and he expects it will increase again in 2012. Jake also decided to pay voluntary EI premiums on his self-employed income for 2011. Jake's net tax owing and CPP contributions payable were $6,000 for 2010, and his net tax owing, CPP contributions payable, and voluntary EI premiums payable were $6,600 for 2011.
We calculate Jake's March and June instalment payments for 2012 each as one-quarter of his net tax owing and CPP contributions payable for 2010.
We calculate his September and December 2012 payments by subtracting the first two instalment payments that we calculated above from his net tax owing, CPP contributions payable, and voluntary EI premiums payable for 2011 and dividing the result by two.
Using the no-calculation option, Jake makes the four instalment payments shown on his 2012 reminders, as follows:
| Instalment payments | ||
|---|---|---|
| March 15 | ($6,000 ÷ 4) | $1,500 |
| June 15 | ($6,000 ÷ 4) | $1,500 |
| September 15 | ($6,600 − $3,000) ÷ 2 | $1,800 |
| December 15 | ($6,600 − $3,000) ÷ 2 | $1,800 |
| Total | $6,600 |
