Check out the details about CRA Prescribed Rate 2024: What is the CRA Prescribed Interest rate in 2024? Full Analysis from this article. Various information on CRA Prescribed Rate 2024: What is the CRA Prescribed Interest rate in 2024? Full Analysis and other substantial details are included in this article.
CRA Prescribed Rate 2024
The prescribed rate is used to calculate the interest on overpaid and overdue taxes. In addition, the CRA prescribed rate can also be used to determine Overpaid remittances.
The prescribed rate set by the CRA remains in effect for a specified period. The prescribed rate can also be used to calculate taxable benefits on employee loans at low or no interest.
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What is the CRA Prescribed Interest rate in 2024?
The annual interest rates are calculated in four quarters every year. The prescribed interest rate is directly linked to the Government’s 90-day treasury bill’s yield. The estimate is determined using a set procedure that averages the 3-month Treasury Bills for the 1st month of the prior quarter up to the next highest whole percentage point.
In 2024, the CRA Prescribed Rate is likely to go up by a margin of 1%. This will be implemented on January 1, 2024, for the first quarter of the year. This means that the prescribed interest rates on the Overdue remittances and Overpaid remittances (Corporate/Non-corporate taxpayers) will increase by 1%.
The current quarter of 2024 is in effect from October 1 and will remain in effect till December 31. The interest rate charged by the CRA on overdue taxes is higher than the interest rates paid by the CRA on overpaid taxes.
The overdue remittances for the fourth quarter of 2024 for GST, HST, fuel charge, Softwood lumber products export charge, Excise tax, Air travellers security charge and Excise duty except brewer licensees are set at 9%.
Whereas the overpaid remittances (corporate) are currently at 5%. The same overpaid remittances for non-corporate taxpayers are set at 7%. Hence, when the prescribed rate will increase, all these interest rates will go up.
This means that in 2024 (first quarter), the prescribed rate (overdue) will become 10%, and the prescribed rate (overpaid) will become 6%. More information on the upcoming CRA prescribed rates for the next year will be provided by the CRA shortly.
What is the current CRA Prescribed Rate?
The CRA has prescribed annual interest rates for amounts owed or owing. The interest rate applied on the employment insurance premiums and the CPP contributions is 9%. Whereas the interest rate paid by the government on overpayments of corporate taxpayers is 5%.
Q4 (2024) –
| Name | Overpaid Remittances (Corporate) | Overpaid Remittances (Non-corporate) | Overdue Remittances |
| HST | 5% | 7% | 9% |
| Excise tax (non-GST/HST) | 5% | 7% | 9% |
| GST | 5% | 7% | 9% |
| Excise duty (brewer licensees) | – | – | 7% |
| Air travellers security charge | 5% | 7% | 9% |
| Softwood lumber products export charge | 5% | 7% | 9% |
| Fuel charge | 5% | 7% | 9% |
| Excise duty except brewer licensees (due after June 30, 2003) | 5% | 7% | 9% |
| Excise duty except brewer licensees (due before June 30, 2003) | – | – | 7% |
The prescribed rate used to compute the taxable benefits for the workers and shareholders from low or no-interest loans is 5%. The interest rate for pertinent loans or indebtedness is 8.99%.
The overdue remittance rate is what an individual is charged on the due amounts to the CRA, and the overpaid remittance rate is what the CRA pays on the due amounts to the individuals.
CRA Prescribed Rate – Full Analysis
The CRA prescribed interest rate was previously changed in the second quarter of 2024. Before that, the interest rate applied on the employment insurance premiums and the CPP contributions was 8%, and the interest rate on overpayments was 4%.
The first quarter was in effect from January 1 to March 31. The interest rate for pertinent loans or indebtedness is 8%. The overpaid corporate remittances were 4%, and the overpaid non-corporate remittances were 6%.
Since the change in Q2 (2024), the interest rates have remained unchanged till Q4(2024). However, in Q1 (2024), the interest rates are likely to again go up by 1%.
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The complete list of historical prescribed rates on overpaid and overdue remittances can be learned by visiting the Government of Canada’s authorized web portal.
The prescribed rate loan for a family member can significantly reduce taxes. This can be an effective strategy when one member earns a higher pay and is taxed at a higher marginal tax rate than the other member.
The current rate for the prescribed rate loan is set at 5%. This was at 1% till the 2nd quarter (2022). Since then, it began increasing by 1% in each quarter till it became 5% in the second quarter of 2024.