The quarterly instalment reminders some retirees start receiving

For forty years, tax came off the pay cheque before it reached the bank. Then retirement arrives, the income comes from three or four different places, and some of those places take off no tax at all. The first sign that something has changed is often an envelope from the Canada Revenue Agency in February or August: an instalment reminder, with dates and amounts.

It is not a penalty notice and it is not an error. It is the CRA asking for tax to be paid during the year rather than all at once in April. Understanding why it arrived makes it much easier to decide what to do about it.

Why retirees start receiving them

Employers deduct tax at source. Many retirement incomes do not, unless you ask. The Government of Canada states that if you live in Canada, tax is not automatically taken off monthly CPP payments; you can request deductions to avoid owing tax when you file. The same voluntary-deduction request covers Old Age Security. Minimum withdrawals from a RRIF are another common source of income with little or nothing withheld.

Add those together with a workplace pension and some investment income, and a retiree can owe a sizeable balance each April. Once that balance is large enough for long enough, the CRA asks for it in quarterly pieces instead.

The threshold that triggers instalments

For 2026, the CRA's test is that you must pay instalments if your net tax owing is more than $3,000 in 2026 and was more than $3,000 in either 2025 or 2024. In Quebec, where provincial tax is collected separately, the federal threshold is $1,800. Your province of residence on December 31 decides which threshold applies.

Net tax owing is, broadly, the tax left to pay when you file, after the tax already withheld at source. That is the number to watch, rather than your total income or your total tax.

The four dates, and the two reminders

For most individuals the instalment due dates are March 15, June 15, September 15 and December 15. If a due date falls on a Saturday, Sunday or a public holiday the CRA recognizes, a payment received on the next business day is considered on time.

The reminders come twice a year. The February reminder covers the March and June payments; the August reminder covers September and December. A reminder does not by itself mean you must pay: it is based on past years, and whether instalments are actually required depends on the test above, including your current-year figures.

The three ways to work out the amount

The current-year option carries a risk: if the estimate turns out too low, the CRA can charge instalment interest and penalties on the shortfall. Late or insufficient payments under any option can attract those charges.

The quieter alternative: tax at source

Instalments are one way to pay during the year. The other is to have more tax withheld from the income itself, so the April balance never crosses the threshold. For CPP and OAS, the request can be made in My Service Canada Account under "Change my tax deductions", or by mailing the Request for Voluntary Federal Income Tax Deductions form (ISP3520CPP) to Service Canada. RRIF and workplace pension payers can usually withhold an additional amount if you ask them.

Which approach is better depends on the household. Some people prefer instalments because they keep the money a few weeks longer; others prefer withholding because it removes four dates from the calendar. Either is legitimate.

Who this matters for, and what to check

• First-year retirees. The change from payroll deductions to no deductions is when balances usually jump. Look at last April's balance owing; if it was above $3,000, expect a reminder.
• Anyone starting RRIF withdrawals. The first mandatory minimum comes the year after the RRIF is set up, as explained in what has to happen before December 31 of the year you turn 71.
• Executors. Instalments due on or after the date of death do not have to be paid, one of the rules covered in the first weeks after a spouse dies.
• Everyone with a balance owing. Payment is due April 30 regardless of instalments; see why the April 30 deadline matters.

The short version

An instalment reminder means the CRA has noticed that tax is not being taken off at source. The rule is $3,000 of net tax owing this year and in one of the two previous years ($1,800 in Quebec), and the dates are the 15th of March, June, September and December. Paying quarterly is one answer; asking for tax to be withheld from CPP, OAS or a RRIF is the other. The December date sits a week before the last benefit payment of the year, listed in the CPP and OAS payment calendar.

This is private sponsored information published by NIVO Consultancy OÜ on caethe.com. It is not a Government of Canada, Service Canada or Canada Revenue Agency website and has no affiliation with them. Nothing here is financial, tax or legal advice, and no figure in this article is a promise, quotation or entitlement for any reader; amounts and dates were checked against the official sources above on 22 October 2026 and can change. There are no applications, registrations or fees on this website. Never give your Social Insurance Number, banking details or My Service Canada Account or CRA credentials to a website. For anything about your own payments, use My Service Canada Account or contact Service Canada.