Quick answer: The CRA’s late-filing penalty for a GST/HST return is A + (B × C): 1% of the amount owing, plus a quarter of that 1% for each complete month overdue, to a maximum of 12 months. On $15,000 owing filed five months late, that is $150 + $187.50 = $337.50. If you owe nothing, a nil return or a refund. There is no late-filing penalty at all, which is the single best reason to file even when you cannot pay.
If a return is already late, the penalty is smaller filed today than filed next month. Have the late periods filed, or bring them to a free first call.
The formula, exactly
The CRA states the late-filing penalty as A + (B × C). A is 1% of the amount owing, B is 25% of A, and C is the number of complete months the return is overdue, capped at 12. Fully aged, that works out to 4% of the balance — small next to the income-tax late-filing penalty, which starts at 5% and climbs to 17%. That difference misleads people: the GST penalty is modest, but it never travels alone. Interest compounds daily on the unpaid amount at the CRA’s prescribed rate, and the collection posture on unremitted GST is aggressive, because the money was never yours — you collected it from customers in trust.
Two worked examples
| Scenario | A (1%) | B × C | Penalty |
|---|---|---|---|
| $15,000 owing, 5 months late | $150.00 | $37.50 × 5 = $187.50 | $337.50 |
| $40,000 owing, 12+ months late | $400.00 | $100.00 × 12 = $1,200.00 | $1,600.00 |
Both numbers are the penalty only. Arrears interest — compounded daily, at a rate the CRA resets each quarter — runs on top, on both the tax and the penalty, until everything is paid.
When there is no penalty at all
The CRA will not charge a late-filing penalty when you have $0 owing or when it owes you a refund. Read that again if you are sitting on unfiled nil periods: the penalty for filing them late is nothing, while the cost of leaving them unfiled is real. It means demands to file, holds on refunds and rebates across your accounts, and eventually an arbitrary assessment where the CRA invents a number and demands it. Refund periods are stranger still: filing late costs nothing, and the refund is your own money sitting with the CRA in the meantime.
The other three GST penalties, briefly
Three more penalties surround the filing deadline. Ignoring a demand to file is $250 per demand, on top of everything else. Failing to file electronically when you are required to costs $100 the first time and $250 for each return after that. Since periods ending in 2024, nearly every registrant except charities and selected listed financial institutions is required to, so the paper option is effectively gone. And inaccurate reporting on certain amounts carries its own penalty of 5% of the incorrect amount plus 1% per month of the uncorrected difference. None of these replaces the late-filing penalty; they stack.
If you can only do one thing: file
Every penalty above is a function of an unfiled or mishandled return, not an unpaid balance. Filing on time with nothing paid avoids the late-filing penalty entirely and leaves only interest, and the CRA offers payment arrangements for balances it knows about. The expensive path is the quiet one — the unfiled period that compounds in the background. The GST34 return page covers the deadlines by reporting period, and where penalties have already landed because of events beyond your control, the taxpayer relief process can cancel penalties and interest inside its ten-year window.
Common questions
How is the GST late-filing penalty calculated?+
Is there a penalty for filing a nil GST return late?+
What happens if I ignore a CRA demand to file?+
Can I still file my GST return on paper?+
Does filing late affect my input tax credits?+
What are the penalties for late GST filing in Canada?+
Is there a penalty if I owe nothing on the return?+
Is the GST late-filing penalty different in Alberta?+
When is an annual corporation’s GST return late?+
Is there a penalty for paying GST late?+
More than one return outstanding? Catching up on overdue returns sets out the order we file them in, and if the CRA has already written, a demand to file explains the deadline it sets.
Related reading
- GST34: the GST/HST return and its deadlines
- Late-filing penalty calculator (T1/T2)
- What a GST/HST audit actually checks
- RC4288: requesting taxpayer relief
General information current as of August 2026, not advice for your situation. Please speak with a CPA about your circumstances.
Prepared and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working with small businesses and incorporated owners across the Fraser Valley and Canada. About the firm → · Book a free consult →
Behind on GST returns?
The penalty stops growing the day the return goes in. Get the catch-up plan and a fixed quote in writing — free consult, no obligation.
“Personal. Professional. Responsive. Plus he saved me a bundle!”