Late GST filing penalties in Canada: what missing the deadline actually costs

The formula, exactly

The CRA states the late-filing penalty as A + (B × C), where 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

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 — 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 — and since periods ending in 2024, nearly every registrant except charities and selected listed financial institutions is required to — costs $100 the first time and $250 for each return after that; 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

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.