GST/HST Late Filing Penalty and Interest Calculator
One late return, priced exactly. The A plus B times C penalty on your actual dates, interest compounded daily at the prescribed rate, the total owing today, and what each further month of delay adds.
total owing today
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The Penalty, Component by Component
| Component | Basis | Amount |
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Filing and Paying Are Separate Obligations
| Obligation | Your Position | Consequence |
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Total Owing Today
| Item | Basis | Amount |
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If You Wait Longer
| Delay | Penalty | Total Owing |
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Points That Decide This
What to Do Next
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Disclaimer: Section 280.1 imposes a failure to file penalty of A plus B times C, where A is 1% of the amount owing, B is a quarter of A, and C is the number of complete months the return is overdue to a maximum of twelve. The ceiling is therefore 4% of the amount owing, and the penalty applies only where the return itself was filed late. Interest under section 280 is charged at the prescribed rate plus 4%, compounded daily from the day after the return was due until the amount is paid, and is calculated here using the prescribed rates in force since 2018. A nil or refund return filed late attracts no section 280.1 penalty because the penalty is a percentage of the amount owing. Instalment interest for annual filers, gross negligence penalties and offences under section 326 are not modelled. This page is general information, not tax advice.
File Even If You Cannot Pay
This is the single most useful thing on the page, and almost nobody does it. The penalty under section 280.1 is a failure to FILE penalty. If the return goes in on time, there is no penalty at all, however much you owe and however late you pay it.
| On $40,000 Owing, Four Months Late | Penalty | Interest | Total Extra |
|---|---|---|---|
| Filed on time, paid late | Nil | $908 | $908 |
| Filed late, paid on time | $700 | Nil | $700 |
| Both late | $700 | $908 | $1,608 |
Filing on time when you cannot pay removes the entire penalty. It takes an hour and it costs nothing. Businesses hold returns back because they cannot fund the payment, which is the one response that makes the position worse rather than better.
The Formula
Section 280.1 sets the penalty as A plus B times C.
| Component | Meaning |
|---|---|
| A | 1% of the amount owing |
| B | 25% of A, so a quarter of one percent |
| C | The number of complete months the return is overdue, to a maximum of twelve |
| Months Late | Penalty as a Percentage | On $40,000 |
|---|---|---|
| Under 1 | 1.00% | $400 |
| 3 | 1.75% | $700 |
| 6 | 2.50% | $1,000 |
| 12 or more | 4.00% | $1,600 |
The penalty stops growing after twelve months. That surprises people who assume it keeps climbing, and it changes the urgency calculation once a return is more than a year late.
The Interest Never Stops
Interest under section 280 runs at the prescribed rate plus four percent, compounded daily, from the day after the return was due until the amount is paid. It does not cap, and after the first year it is the only thing still growing.
| How Late | Penalty on $40,000 | Interest |
|---|---|---|
| 3 months | $700 | $908 |
| 13 months | $1,600 | $3,364 |
| 3 years | $1,600, capped | $11,536 |
At three years the interest is more than seven times the penalty. Anyone focused on the penalty is watching the smaller number.
A Nil Return Carries No Penalty
Because the penalty is a percentage of the amount owing, a nil return or a refund return filed late attracts nothing under section 280.1. That does not make it a good idea, because the CRA can still issue a demand and can notionally assess, but it does mean a registrant with credits exceeding tax collected is not accruing a penalty while behind.
What a Demand to File Changes
A demand does not change the penalty arithmetic. It changes what happens next. Once a demand has been issued, the CRA is signalling that it will assess the period itself under section 299 if you do not file, estimating your sales and allowing no input tax credits at all. Failing to comply with a demand is also an offence under section 326, carrying a fine and, in serious cases, imprisonment.
The practical consequence is that a demand converts a slow-moving problem into a deadline. A return filed after a notional assessment still replaces it, but the collection action that follows the assessment does not wait politely in the meantime.
Directors Are Personally on the Hook
Section 323 of the Excise Tax Act makes a director personally liable for unremitted net tax together with the interest and penalties on it, where the corporation fails to pay and the CRA cannot collect from it. That liability survives the corporation, subject to a two-year limit running from when you ceased to be a director.
It is one of the few areas where the corporate veil genuinely offers no protection, and it is why HST arrears deserve attention ahead of most other creditors.
Can It Be Cancelled
Taxpayer relief can cancel penalties and interest where the failure arose from circumstances beyond your control, such as serious illness, a natural disaster or a CRA error. It is discretionary, it is limited to the ten calendar years before the request, and ordinary cash flow difficulty on its own is rarely enough.
Where the facts genuinely support it, apply. But file first. A relief application on an unfiled return is not a strategy, and the CRA will not consider it while the underlying obligation is outstanding.
Practical Order of Operations
- File the return today, even with estimated figures you will amend, because filing stops the penalty clock.
- Pay whatever you can against the balance, since interest runs on the unpaid amount rather than the whole liability.
- Set up a payment arrangement for the remainder, which the CRA agrees routinely once the returns are in.
- Fix the filing calendar, because a second round of arrears is treated very differently from a first.
- Apply for relief afterwards if the circumstances genuinely support it.
What This Calculator Does Not Cover
- Multiple periods, which need the catch-up calculation rather than this one
- Instalment interest for annual filers who were required to pay instalments
- Gross negligence penalties where tax was collected and knowingly not remitted
- Offences and prosecution under section 326
- Notional assessments already raised and what filing does to them
- Input tax credits expiring under the four-year deadline, which matters on older periods
An hour of work removes the penalty entirely. If the only thing stopping you filing is not being able to fund the payment, file anyway. Our GST/HST return filing service covers the return, the arrears position and the payment arrangement.
Frequently Asked Questions
Common questions on late HST returns.
Related Calculators and Guides
More tools for HST compliance.
File Today. The Penalty Stops the Moment You Do.
Send us the period and whatever figures you have. We will prepare and file the return, calculate the exact arrears, and set up a payment arrangement for the balance if you need one.