Updated Checked by the Tax-Services.ca editorial team How we check
You pay corporation tax in Canada two months after your year end, or three months if you qualify as a small Canadian-controlled private corporation. The return itself is due six months after year end, and that gap trips up a lot of owners.
When does the money actually have to arrive?
The default is two months after the end of the tax year, as the CRA’s balance-due day page sets out. Three months is a special case, and you only get it when all of these are true: the corporation was a Canadian-controlled private corporation (a CCPC) all year, it claimed the small business deduction this year or last, and its taxable income for the previous year stayed within its business limit. If you have associated corporations, their incomes and limits are added up together.
The filing deadline doesn’t move. The T2 return is due six months after year end, and paying at two months or three makes no difference to that. So a December 31 year end means a balance due on February 28 or March 31, and a return due June 30. Payments that land on a weekend or a holiday count on time if they arrive the next business day.
Picture Priya, who runs a small design company in Winnipeg with a December 31 year end. She’s a CCPC, claims the small business deduction and stayed under her limit last year. Her balance is due March 31, but her T2 is still due June 30. Three months of breathing room on the money, and not a day more on the paperwork.
Paying corporation tax during the year
Most active corporations don’t wait for year end. They pay partial amounts during the year, monthly by default. A small CCPC with a perfect compliance history, taxable income of $500,000 or less and taxable capital of $10 million or less can pay quarterly instead. For a calendar year that’s March 31, June 30, September 30 and December 31.
Miss them and interest runs from each missed date. Once instalment interest goes over $1,000, the CRA can add a penalty as well. The interest rate changes every quarter, so read the current one on the CRA site before you plan around a number.
The balance you pay at year end is only what’s left after instalments. Pay well during the year and the final cheque is small.
How much is the bill likely to be?
Federal tax is 15% on general income and 9% on the first $500,000 for a qualifying CCPC. Provinces add their own rate. This table shows the combined rates our calculator uses for a 2026 calendar year.
| Province | Combined small business rate | Combined general rate |
|---|---|---|
| British Columbia | 11.0% | 27.0% |
| Manitoba | 9.0% | 27.0% |
| New Brunswick | 11.5% | 29.0% |
| Nova Scotia (limit $700,000) | 10.5% | 29.0% |
Ontario is harder to pin down. The province cut its small business rate from 3.2% to 2.2% on July 1, 2026, and a calendar-year company gets a blend of the two. We worked that blend out ourselves at about 11.7% combined, and it isn’t a published figure, so treat it as a ballpark. From 2027 the combined rate is 11.2%. Quebec is different again and needs its own return.
What does a real payment look like?
Take a British Columbia CCPC with $300,000 of taxable business income. Federal tax is $27,000 and provincial tax is $6,000, so the total is $33,000, or 11.0%. That leaves $267,000 in the company. If it wasn’t a CCPC, the same income would cost $81,000, or 27.0%.
Put your own numbers into the corporate tax calculator before you set aside cash. If you’re on quarterly instalments, divide the yearly figure by four. For the BC company above that’s $8,250 a quarter, so see whether that matches what you’ve been paying.
What if you can’t pay on time?
File the return on time anyway. The late-filing penalty below is for returns that arrive late, while a late payment on its own brings interest. A shortfall isn’t a reason to skip the filing date, and the CRA’s collections people generally work out arrangements more easily with someone who filed.
Mistakes that cost money
The most common one is assuming the extra month applies to everything. It applies to the balance only, not the return. Filing late brings a penalty of 5% of the unpaid tax, plus 1% for each full month, up to 12 months. If you were penalized in any of the previous three years, that becomes 10% plus 2% a month, up to 20 months.
What does that look like? Say $20,000 is unpaid and the return is three full months late. The first-time penalty is 5% plus 3%, so 8%, which is $1,600. For a repeat offender it’s 10% plus 6%, so 16%, or $3,200, before any interest.
Another is forgetting that the return is required even when nothing is owing. Inactive corporations still file. Most corporations must also file electronically, and the CRA charges $1,000 if one that should have filed online doesn’t.
And don’t mix the corporate bill up with payroll or sales tax. Source deductions and GST/HST run on separate schedules, which you can model with the payroll remittance calculator and the GST/HST calculator. If you pay yourself in dividends, the dividend tax calculator shows the second layer of tax.
How we checked the figures
Rates, deadlines and penalties come from the Canada Revenue Agency pages on corporation tax rates, balance-due day, instalments and penalties, checked in September 2026. Provincial rates come from the CRA provincial pages and provincial sites. This is an independent site that doesn’t speak for any government. Payment dates for 2027 aren’t published yet, so the deadlines here follow the rules by year end.
Frequently asked questions
When is corporation tax due in Canada?
Two months after your tax year end, or three months for a qualifying small CCPC. The T2 return is due six months after year end either way.
Can I pay corporation tax in instalments?
Yes. Most corporations pay monthly during the year. A small CCPC with a clean record and taxable income of $500,000 or less may pay quarterly.
What happens if I pay late?
Interest builds from the due date. A late return also brings a penalty of 5% of the unpaid tax plus 1% for each full month, up to 12 months.
How much corporate tax does a small business pay?
In British Columbia a CCPC with $300,000 of active business income pays $33,000, or 11.0%, on our calculator. Other provinces differ.
Do I file a T2 if the company earned nothing?
Yes. Inactive corporations must still file, even when no tax is payable.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST