Quick answer: If you cannot pay a Canada Revenue Agency (CRA) debt in full now, CRA says you can schedule a series of pre-authorized debit payments in your online account or call to discuss a payment arrangement. If a collections officer sent you a letter, call the number on that letter. A payment arrangement spreads payments over time; it does not erase the debt.
What this means: Start with an amount you can actually manage. CRA provides a personal income-and-expense worksheet. Interest may continue on an unpaid tax balance, and you still need to keep up with future returns and obligations.
What to do next: Check the current debt in your CRA account, complete the worksheet, and follow CRA’s online or phone arrangement steps. If an agreed payment will be difficult, contact CRA before paying less than agreed.
Who can use a payment arrangement?
CRA’s arrangement page covers people who cannot pay a debt right away. This guide concentrates on a personal income-tax balance. CRA also lists other debts that can be scheduled online, including some benefit repayments and business obligations; the available route depends on the debt type. CRA’s current public arrangement page does not state a universal “under $10,000 and within 12 months” rule. Do not use an unsourced dollar or time cutoff to decide whether to contact CRA.
First confirm what you owe and whether a payment you already sent has been applied. A notice of reassessment may show a balance that has since changed. If you disagree with the assessment itself, look at the formal objection process separately. Asking to pay over time does not determine whether an assessment is correct.
Work out an amount you can manage
CRA offers a monthly net income-and-expense worksheet to help you see what remains after regular expenses. Use your own current figures. Include regular bills and unavoidable costs rather than copying a percentage from someone else’s example. This is preparation for a conversation with CRA, not a guarantee that it will accept a particular schedule.
Keep the notice, current account balance and documents that explain your income and expenses close at hand. CRA’s phone instructions say you may need identification, the notice or assessed return, and account details. If your income changes from month to month, note that rather than presenting a single good month as if it were typical.
How to schedule payments online
For an eligible personal tax debt, CRA says you can use My Account to create a series of pre-authorized debit (PAD) payments from your bank account. Its current steps are:
- Sign in to your CRA account.
- Select Proceed to pay.
- Choose Schedule a series of payments.
- Fill in the fields, review the PAD agreement and confirm.
CRA says a PAD agreement begins when the first scheduled payment is withdrawn. Check the bank account, amount and dates before confirming, and keep the agreement details. If your CRA account is locked, use CRA’s official phone route rather than guessing at the online steps. The specific account menu can change, so use the live CRA instructions if it looks different.
How to arrange it by phone
CRA lists two phone options: its automated TeleArrangement service for personal income-tax debt and speaking with an agent. Use the number on your notice or CRA’s current arrangement page to reach the correct service. If a collections officer wrote to you, CRA specifically says to call the number on that letter as soon as possible.
Before calling, have the account and identity details CRA lists, your current balance and your income-and-expense information. Explain what you can pay regularly and ask CRA what the arrangement requires. There is no need to send your Social Insurance Number or bank details to this website; give sensitive details only through CRA’s official channel.
What happens after you set it up?
CRA says to make the agreed payments on their dates, file future returns on time and keep up with your obligations. It may review the arrangement periodically. Continue checking your CRA account to see how the debt changes. If you use PAD, confirm that each scheduled withdrawal actually occurs and is applied to the correct account.
Interest on late tax debt begins from the due date, and CRA’s interest-rate guidance says rates may change each quarter. Do not budget from an outdated rate quoted in another article. CRA says its online scheduled-payment service can estimate future interest on a debt. The actual balance depends on your account and payment timing.
An arrangement also does not necessarily prevent CRA from using amounts it owes you against your debt. CRA’s arrangement guidance says it may apply some federal benefits or credits even while you are making the agreed payments. The treatment depends on the debt and benefit, so check what happened in your own account and ask CRA if a credit or refund was applied unexpectedly. That credit can change the remaining balance; it is not a reason to stop an agreed withdrawal without first speaking to CRA.
What if you cannot make an agreed payment?
Call CRA before you pay less than agreed. CRA’s current instructions say to call if you need to change the arrangement or cannot make a payment. If you pay less without modifying it first, CRA may take legal action to collect the debt. That is a possibility, not an automatic result of one missed payment.
If you need a different payment method for a particular instalment, check CRA’s payment options and confirm with CRA how it should be applied to the arrangement. Do not assume that a different transfer automatically changes your agreement.
If you cannot get into My Account, you still have the phone route. Read the number from CRA’s arrangement page or the collections letter sent to you; avoid relying on a number copied into an old article or a search advertisement. Have your notice and updated income-and-expense worksheet ready. Explain the changed circumstances plainly and ask what CRA needs to review a different schedule. Keep a record of the date of the call and any terms CRA confirms, then check your account for the agreed payments.
A simple example of an income change
Imagine a person has agreed to monthly withdrawals but then loses some work hours. The useful first step is to update the income-and-expense worksheet with the new figures. Before the next agreed payment, they call CRA, explain the change and ask whether the arrangement can be modified. CRA decides what it can accept. This example does not assume an approval, a particular payment term or a specific interest cost.
Common mistakes to avoid
- Assuming a published dollar cutoff: The current CRA arrangement page does not give a universal $10,000 approval rule.
- Agreeing to an amount you have not tested against regular expenses: Use the CRA worksheet first.
- Thinking an arrangement stops interest: Check the balance and current quarterly rate.
- Letting a payment fail without calling: Ask CRA to modify the arrangement before paying less.
- Forgetting future returns: CRA says you must keep filing and meeting current obligations.
Frequently asked questions
- Can I set up a CRA payment arrangement online?
- For eligible debts, yes. In your CRA account select Proceed to pay, then Schedule a series of payments and confirm the PAD agreement.
- Is there a fixed $10,000 or 12-month eligibility rule?
- CRA’s current public arrangement page does not state a universal rule like that. Check the options for your debt and contact CRA when the online route does not fit.
- Does an arrangement stop interest?
- No. Interest can continue on an unpaid tax balance, and CRA’s rates may change quarterly.
- What if my income drops?
- Update your income-and-expense figures and call CRA before you pay less than the agreement requires. CRA will tell you whether it can change the arrangement.
- Should I call the officer who wrote to me?
- Yes. CRA specifically says to call the number on a collections officer’s letter as soon as possible.