Payment Plans in British Columbia
Reviewed by the Commoner Law Editorial Team. Sourced from Canadian federal statutes and official sources. Provincial information reflects each province's own legislation and court rulings. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
If you owe money to the CRA and cannot pay the full amount right away, you can set up a payment arrangement under Section 220(3.1) of the Income Tax Act.
A payment plan lets you pay your tax debt in regular instalments over time. However, interest continues to accumulate on your balance. The CRA charges a prescribed interest rate (updated quarterly) on overdue amounts, compounded daily.
You can set up a payment arrangement online through My Account or by calling the TeleArrangement line at 1-866-256-1147. Many plans can be approved automatically if they meet CRA guidelines.
You must keep filing future tax returns on time, even while you are on a payment plan. Missing a filing deadline can cause the CRA to cancel your arrangement.
When does it apply?
This applies to any individual or business that owes money to the CRA.
- It covers income tax, GST/HST, payroll deductions, and benefit repayments.
- You can request a plan whether you owe a few hundred dollars or tens of thousands.
What to Do If You Owe Taxes to the CRA and Can't Pay in Full
- File your tax return on time, even if you cannot pay — filing late adds extra penalties.
- Pay as much as possible upfront to reduce the interest that builds up.
- Calculate an affordable monthly amount based on your income and expenses.
- Set up pre-authorized debit (PAD) through My Account for automatic payments.
- Make your first payment on schedule — missing the first payment can cancel the arrangement.
What should you NOT do?
- Don't ignore collection letters — the CRA can garnish your wages, freeze your bank accounts, and seize your assets.
- Don't miss a payment without calling CRA first — contact them before the due date to renegotiate.
- Don't assume a payment plan stops interest — interest at the CRA's prescribed rate keeps growing on the unpaid balance every day.
- Don't forget that CRA can offset benefits against your debt — your GST/HST credit or CCB payments may be applied to what you owe.
How British Columbia differs from federal law
Federal tax debts are collected by the CRA under uniform rules. For BC provincial tax debts (PST, property transfer tax, employer health tax), the BC Ministry of Finance has its own collection process.
- If you owe PST, you may be able to arrange a payment plan with the Consumer Taxation Branch of the BC Ministry of Finance. Interest continues to accrue during the payment period.
- The Employer Health Tax (EHT), which BC imposes on employers with payrolls over a certain threshold, is also collected by the BC Ministry of Finance. Unpaid EHT can lead to penalties and collection action.
- For property transfer tax debts, the Ministry of Finance can register a lien against the property.
- BC cannot garnish federal benefits like GST credits to collect provincial tax debts — only the CRA can offset federal payments.
Additional Steps in British Columbia
For federal tax payment plans, contact the CRA directly. For BC provincial tax debts, call the Consumer Taxation Branch at 1-877-388-4440 to discuss payment options before the debt goes to collections. Act quickly — interest and penalties accumulate.
Relevant Law: Provincial Sales Tax Act, SBC 2012, c. 35; Employer Health Tax Act, SBC 2018, c. 42; Property Transfer Tax Act, RSBC 1996, c. 378
Common Questions
When does payment plans apply?
This applies to any individual or business that owes money to the CRA.It covers income tax, GST/HST, payroll deductions, and benefit repayments.You can request a plan whether you owe a few hundred dollars or tens of thousands.
What should I do if I owe money to the CRA in Canada but can't afford to pay it all at once?
File your tax return on time, even if you cannot pay — filing late adds extra penalties.Pay as much as possible upfront to reduce the interest that builds up.Calculate an affordable monthly amount based on your income and expenses.Set up pre-authorized debit (PAD) through My Account for automatic payments.Make your first payment on schedule — missing the first payment can cancel the arrangement.
What mistakes should I avoid with payment plans?
Don't ignore collection letters — the CRA can garnish your wages, freeze your bank accounts, and seize your assets.Don't miss a payment without calling CRA first — contact them before the due date to renegotiate.Don't assume a payment plan stops interest — interest at the CRA's prescribed rate keeps growing on the unpaid balance every day.Don't forget that CRA can offset benefits against your debt — your GST/HST credit or CCB payments may be applied to what you owe.
Payment Plans in other states
Same topic, different jurisdiction. Pick the one that applies to you.