Why do you have to pay tax by instalments?

You have to pay tax by instalments for the same reason that most people have tax withheld from their income throughout the year. If you earn income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by instalments.

This can happen if you earn rental, investment, or self-employment income, certain pension payments, or income from more than one job.

You may be able to avoid paying your taxes by instalments -  If you receive income that has tax withheld at the source, you can ask that the amount of deductions be increased, instead of making instalment payments. See Do you want to reduce or elimate the amount of instalment payments you have to make? for more information.

Forms and publications

• Pamphlet P110, Paying Your Income Tax by Instalments