# CRA payment arrangements: setting up a plan to pay tax over time

Source: https://canadataxdesk.com/after-you-file/cra-payment-arrangement
Publisher: Canada Tax Desk (canadataxdesk.com), independent editorial site
Topic: After You File
Last updated: 2026-09-18

> CRA payment arrangements let you pay a tax debt in instalments you agree with the CRA. If you owe $1,000 or more in personal income tax or COVID-19 benefit repayments, you can set one up yourself with Manage balance in My Account, usually as scheduled pre-authorized debits. Interest keeps running at the prescribed rate, 7% for October to December 2026, until the debt is paid.

## Key facts

- Online self-service threshold: $1,000 or more of personal tax or COVID-19 benefit debt
- Where: Manage balance in My Account
- Interest during the plan: Continues, compounded daily (7% Oct to Dec 2026)
- Refunds and benefits: Can be applied to the debt
- Manage balance launched: October 22, 2025

## Who can set up CRA payment arrangements

CRA payment arrangements are open to anyone who owes the CRA and cannot pay in full right away. What changes is the channel. Since October 22, 2025, individuals with $1,000 or more of personal income tax or COVID-19 benefit debt can use the Manage balance service in My Account without speaking to a collections officer.

Through My Account the CRA lists these personal debts as eligible for an online arrangement: income tax, and repayments of benefits and credits such as COVID-19 benefits, the GST/HST credit, the Canada Dental Benefit and the Canada Carbon Rebate, plus TFSA amounts and Underused Housing Tax. Other debts, or balances under the online threshold, are arranged by phone using the number on the CRA's payment arrangements page.

The CRA's June 2026 tax tip reported that, by May 15, 2026, Manage balance had been presented to 5.95 million taxpayers and $1.1 billion had been attributed to the service.

## Setting up a CRA payment plan online in My Account

Before proposing anything, work out a monthly figure you can keep up for the whole plan. A plan you break costs more than a slower plan you keep.

1. Sign in to My Account and open the **Manage balance** service.
2. Check the total owing and which tax years it comes from. If a year looks wrong, sort that out first through a change request or an objection.
3. Choose to schedule a series of payments. The CRA sets these up as pre-authorized debits from your bank account.
4. Pick amounts and dates that match your pay cycle. The first debit must be scheduled at least 5 business days ahead.
5. Review and confirm, then save the confirmation. If the options do not fit, use the same service to contact a collections officer or request a callback.

### When the CRA asks for financial details

For larger debts or longer plans, the CRA may want proof of your ability to pay. Its collections policy says you may need to give supporting documents for your income, expenses, assets and liabilities, and that it expects you to have tried reasonable options such as borrowing or rearranging your finances first.

## CRA payment arrangement interest

An arrangement holds off collection action as long as you keep to it; it does not stop interest. The CRA keeps charging interest at the prescribed rate, compounded daily, on unpaid tax and penalties until the balance reaches zero. That rate is 7% for October 1 to December 31, 2026 and is reset each quarter.

### Payment arrangement calculator: a worked example

The table models a $4,800 debt repaid at $800 a month, with interest at a steady 7% compounded daily over months of about 30.4 days. The editorial team calculated it; your actual figures depend on exact dates and future quarterly rates.

| Month | Interest added | Balance after payment |
| --- | --- | --- |
| 1 | $28.06 | $4,028.06 |
| 2 | $23.55 | $3,251.61 |
| 3 | $19.01 | $2,470.63 |
| 4 | $14.44 | $1,685.07 |
| 5 | $9.85 | $894.92 |
| 6 | $5.23 | $100.15 |
| 7 | $0.59 | $0 (final payment $100.74) |

$4,800 repaid at $800 a month at 7% (editorial calculation)

Total interest comes to about $101. Stretching the same debt to $400 a month takes 13 payments and about $192 of interest, nearly twice as much. If hardship caused the debt, you can separately ask the CRA to cancel interest with an [RC4288 taxpayer relief request](https://canadataxdesk.com/filing/rc4288-taxpayer-relief-request); interest you pay can be refunded if relief is granted.

## What happens if you miss a payment

The CRA's terms are simple: make each payment on the agreed date, file all future returns on time and keep up with new obligations. If a debit bounces or a return goes unfiled, the arrangement can be cancelled and the CRA may start collection action.

Collection tools set out in the CRA's policy include a requirement to pay, which takes money from wages, other income or bank accounts, and in serious cases seizing and selling assets. Some legal actions normally cannot start until 90 days after the notice of assessment or reassessment. If you know a payment will fail, use Manage balance to contact the CRA before the date rather than after.

> **Keep the next year clean:** A new balance next spring on top of an existing plan puts the arrangement at risk, because the CRA expects you to stay current on new obligations. If you owe more than $3,000 in net tax two years running, look at CRA tax instalments so the debt does not keep rebuilding.

## Refunds and benefits during an arrangement

An active plan does not protect refunds or benefit payments. The CRA can apply income tax refunds, GST/HST credit payments and other federal benefit payments to your debt, a process it calls set-off. Budget for that: if you rely on a spring refund, it may go straight to the balance.

The upside is that each set-off shortens the plan and cuts the interest. The updated total appears in My Account after each set-off, and your [notice of assessment](https://canadataxdesk.com/after-you-file/notice-of-assessment) for the next year shows whether a refund was due before any set-off. For how the original balance was calculated, see [CRA balance owing](https://canadataxdesk.com/after-you-file/cra-balance-owing), and for the full post-filing picture the [after you file guide](https://canadataxdesk.com/after-you-file).

## Common questions

### Can I set up a payment plan with the CRA?

Yes. Anyone who owes the CRA can ask for a payment arrangement. If your personal income tax or COVID-19 benefit debt is $1,000 or more, you can set one up yourself with Manage balance in My Account.

### Does interest still apply on a CRA payment arrangement?

Yes. Interest keeps accruing at the prescribed rate, compounded daily, until the debt is paid in full. The rate is 7% for October to December 2026.

### Can I set up CRA payment arrangements online if I owe less than $1,000?

The self-service option in Manage balance is for debts of $1,000 or more. For smaller amounts you can pay in full or in parts online, or call the CRA to agree on a plan.

### What happens if I miss a CRA payment arrangement payment?

The CRA can cancel the arrangement and take collection action, such as a requirement to pay that takes money from wages or bank accounts. Contact the CRA before the payment date if you know you cannot make it.

### Will the CRA keep my tax refund if I have a payment plan?

It can. Refunds, GST/HST credit payments and other federal benefits can be applied to your debt even while an arrangement is in place.

### Do I have to call the CRA to set up a payment arrangement?

Not if your personal income tax or COVID-19 benefit debt is $1,000 or more: Manage balance in My Account lets you schedule payments yourself, and you can request a callback from the same service. Other debts are arranged by phone.

## Sources

- [Arrange to pay your debt over time (CRA)](https://www.canada.ca/en/revenue-agency/services/payments/payments-cra/payment-arrangements.html)
- [Can't pay your tax debt right away? Manage balance service (CRA tax tip, June 2026)](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/cant-pay-tax-debt-options-help-including-manage-balance-service.html)
- [IC98-1, Tax collections policies (CRA)](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/ic98-1/tax-collections-policies.html)
- [Prescribed interest rates, October 1 to December 31, 2026](https://www.canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates/2026-q4.html)
- [What you need for the 2026 tax filing season (CRA)](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/what-you-need-for-2026-tax-filing-season.html)