The True Cost of Being Late

Many business owners in Sault Ste. Marie underestimate CRA penalties. A "minor" late filing can quickly compound into hundreds or thousands of dollars in unnecessary costs.

Late Filing Penalties

For personal and corporate tax returns, the late filing penalty is 5% of the balance owing, plus 1% for each additional month late (up to 12 months). For repeat offenders, these penalties double: 10% plus 2% per month.

Late Payment Interest

The CRA charges compound daily interest on unpaid balances. The prescribed interest rate changes quarterly — as of early 2026, it sits at approximately 9-10% annually. This applies to all overdue amounts including penalties.

Payroll Remittance Penalties

Payroll penalties are particularly aggressive:

1-3 days late: 3% penalty
4-5 days late: 5% penalty
6-7 days late: 7% penalty
8+ days late: 10% penalty
Repeat failures: 20% penalty

HST/GST Late Filing

Similar to income tax: 1% of the amount owing plus 0.25% for each month late, up to 12 months.

Prevention Is Cheaper Than Penalties

Every dollar spent on professional bookkeeping saves multiples in avoided penalties. Fusion Financial maintains compliance calendars for every client, ensuring deadlines are never missed. Get a quote to protect your bottom line.

Understanding CRA Penalties and Interest: What You're Really Paying