The short version
- A payment arrangement is an agreement to pay a CRA debt over time. Personal income tax, GST/HST, corporate tax, payroll and many benefit repayments qualify.
- You can set one up yourself with pre-authorized debits in My Account, My Business Account or Represent a Client, or by calling CRA (1-888-863-8657 for personal income tax debts).
- Interest keeps running on the balance at the prescribed rate (7% for October to December 2026), compounded daily. An arrangement stops collection action, not interest.
- CRA expects you to pay as much as you reasonably can, file all future returns on time, and stay current on new taxes. It can still keep refunds and some benefit payments to apply to the debt.
- Miss a payment without calling first and CRA may move straight to legal collection action.
CRA Payment Arrangements: How They Work
Owing CRA more than you have isn't unusual, and CRA has a standard process for it. A payment arrangement turns a scary balance into a monthly bill, and keeps the collections officer from contacting your bank or your employer. The catch is that CRA, unlike your cousin, charges interest and checks whether you're really paying all you can. Here's how to set one up so it sticks.
What a Monthly Plan Costs
A $12,000 balance at 7%, compounded daily:
| Monthly payment | Paid off in | Interest along the way |
|---|---|---|
| $500 | about 26 months | about $970 |
| $750 | about 17 months | about $640 |
| $1,000 | about 13 months | about $480 |
That's at today's rate; it changes every quarter. Penalties already charged stay unless you get taxpayer relief. If a bank line of credit costs less than 7%, borrowing to pay CRA off can be cheaper, and CRA will usually ask whether you've tried.
What monthly payment will CRA accept?
Enter what you owe, your income and your regular expenses. The assistant builds the budget CRA asks for, suggests a realistic monthly amount and shows the interest and payoff date.
Setting One Up
- Confirm the balance in My Account, and file any missing returns first; see unfiled tax returns.
- Do a budget. CRA's personal income and expense worksheet is what a collections officer will look at: income, rent or mortgage, food, transportation, debts.
- Online: in My Account (or My Business Account), schedule a series of pre-authorized debits from your bank account. For many simple debts, that's the whole process.
- By phone: for larger debts, debts already in collections, or when the online option isn't offered, call the collections line with your SIN or business number, address and tax documents ready.
- Keep the confirmation and the payment schedule.
What CRA Expects
- Pay as much as you reasonably can. For larger debts CRA may ask for details of your income, expenses, assets and debts, and whether you could borrow or sell something.
- Stay current. File every return on time and pay new taxes as they come due, including instalments if you're self-employed. A new debt piling on top usually ends the arrangement.
- Refunds and credits go to the debt. CRA can apply refunds and some benefit and credit payments even while you're paying.
- Periodic reviews. CRA may revisit the arrangement if your situation changes, for better or worse.
If You Can't Make a Payment
Call before the payment date and ask to change the arrangement. Skipping a payment silently is the fastest way to a requirement to pay at your bank or employer. If the debt simply can't be paid in any realistic time, a payment arrangement isn't the answer; see the options on CRA tax debt, including a consumer proposal through a licensed insolvency trustee. The collections process is on CRA collections.
Arrangement or Something Else?
| Situation | Better first step |
|---|---|
| The amount is wrong | File a notice of objection on time, and pay what you agree with |
| Penalties and interest came from illness, a disaster or a CRA error | Taxpayer relief, alongside the arrangement |
| The debt is from income you never reported and CRA doesn't know | The Voluntary Disclosures Program |
| You'll owe again next year | Fix the cause: more withholding, instalments, or setting money aside; see how much to save for taxes |
Rules of Thumb
- Call early. Arrangements are easiest before collection action starts.
- Offer an amount you can keep paying, even in a bad month.
- Pay extra when you can. Lump sums cut interest straight away.
- File on time every year after, even if you can't pay.
More on dealing with CRA is on the CRA guide.
Payment Arrangement Questions
Can I make a payment plan with CRA?
Yes. You can schedule pre-authorized debit payments in My Account, My Business Account or Represent a Client, or call CRA to set up an arrangement.
Does CRA charge interest on a payment arrangement?
Yes. Interest continues at the prescribed rate, compounded daily, until the balance is paid. It is 7% a year for October to December 2026.
What is the CRA phone number for payment arrangements?
For personal income tax debts, 1-888-863-8657 from Canada and the United States. Business debts have their own lines listed on CRA’s debt collection page.
Will CRA take my refund if I have a payment arrangement?
It can. CRA may apply refunds and some benefit and credit payments to your debt even while you are making payments.
What happens if I miss a payment?
If you pay less than agreed without changing the arrangement first, CRA may take legal collection action, such as garnishing wages or bank accounts. Call before the payment date if you cannot pay.
Sources: CRA, Arrange to pay your debt over time; Call us if you can't pay in full or on time; IC98-1 Tax collections policies; Prescribed interest rates, Q4 2026. Checked October 2026. The payoff table is our calculation at a constant 7% and will change with the rate. CRA does not publish a fixed minimum payment or maximum term.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.