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Home / Managing your money / Understanding tax / If you don’t pay your tax bill

Tax

If you don’t pay your tax bill

2 min read

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On this page you’ll find

  • If you can’t afford to pay your taxes
  • Taxpayer relief
  • If you refuse to pay your taxes

If you don’t pay the tax you owe by April 30 each year, the Canada Revenue Agency (CRA) will charge you interest at the prescribed interest rate:

Interest is compounded daily on the amount you owe starting on May 1.

The prescribed interest rate can change every 3 months.

Warning

If you owe tax and don’t pay it by April 30, you’ll be charged interest on the amount you owe starting on May 1. The interest is compounded daily.

If you can’t afford to pay your taxes

If you can show the CRA that you have reasonably tried to get the money and you still can’t pay your balance in full, you can request a payment arrangement. This is a plan to help you pay your taxes. But you will still be charged daily compound interest on any unpaid balance (starting May 1) until you pay it in full. Learn more about payment arrangements with the CRA.

Even if you can’t pay all of the taxes you owe, you should still file your return on time to avoid any late-filing penalties.

Taxpayer relief

The CRA may waive or cancel penalties and/or interest on your unpaid taxes in certain circumstances. This is known as taxpayer relief. This may happen if:

You lose your job — or suffer some other financial hardship.

There are circumstances beyond your control — for example, disasters like fires and floods, disruptions like a postal strike, a serious illness or accident, or serious emotional or mental distress, such as a death in the immediate family.

The CRA made an error — for example, processing errors, errors in CRA publications or incorrect information provided to taxpayers, and unreasonable processing delays.

How to request taxpayer relief

  1. Complete Form RC 4288 to apply for relief within 10 years of the taxTax A fee the government charges on income, property, and sales. The money goes to finance…+ read full definition owing.
  2. Give the facts and reasons why the charges should be cancelled or waived.
  3. Include all relevant supporting documents and information.

If you refuse to pay your taxes

If you don’t take steps to resolve your unpaid taxes, the CRA can take legal action against you. It can:

  • “garnishee” your income or your bank account, which means that some or all of your pay cheque could go straight to the CRA, or
  • seize and sell your assets to settle your tax bill.

Key point

You can get interest and penalties waived if:

  • you lose your job
  • there are events out of your control
  • the CRA made an error

Warning

If you don’t take steps to resolve unpaid taxes, the CRA can:

  1. arrange for your pay cheque to go straight to the CRA
  2. seize and sell your assets
Last updated September 26, 2023

Articles in this section

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How income tax works 2 min read
Understanding the tax deductions on your pay stub 3 min read
Investors and tax 4 min read
Reducing the tax taken from your pay cheque 2 min read
Tax penalties and fees 3 min read
7 reasons to file a tax return 2 min read
RRSP and TFSA contributions 2 min read
Penalties for not reporting income 2 min read
5 common mistakes to avoid on your tax return 2 min read
Making changes to your tax return 1 min read
If your tax return is reviewed 3 min read
If your tax return is audited 2 min read
If you don't pay your tax bill 2 min read
If you disagree with your tax assessment 1 min read
Filing a final return 1 min read
Charitable donations 2 min read
Medical and attendant care expenses 2 min read
Claim tax credits on student loans and expenses 3 min read
Parents and tax 2 min read
Homeowners and tax 2 min read
Seniors and tax 3 min read
Caregivers and tax 2 min read
The self-employed and tax 3 min read

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