Calculation of the Amount Payable
The amount of your instalment payments is determined using one of the methods below.
Method 1: No-calculation method
We determine the amount of your instalment payments based on the information in your income tax returns for the two previous taxation years. This amount is indicated on the copy of form TPZ-1026.A-V, Instalment Payments Made by an Individual, that we send you.
Method 2: Previous-year method
This method allows you to determine the amount of your instalment payments yourself, based on the amount of your net income tax payable and contributions for the previous year.
Method 3: Current-year method
This method allows you to determine the amount of your instalment payments yourself. It may be to your advantage to choose this method if you estimate that your income tax and contributions payable for the current year will be lower than for the previous year.
To do the calculation using method 2 or 3, use form TP-1026-V, Calculation of Instalment Payments to Be Made by Individuals.
Interest on instalments
We charge interest, compounded daily, on any instalment (or portion thereof) not paid by the due date. Where the amount paid is less than 75% of the required instalment, additional interest of 10% per year, compounded daily, is charged on the unpaid portion of the instalment.
If you use method 1 and you make the payments indicated on the form by the due dates, no interest will be charged, even if the amount of the payments subsequently proves to be insufficient.
If you use method 2 or 3 and the amount of your payments subsequently proves to be insufficient, you may be charged interest.