Updated on February 23, 2024
In the first quarter of 2024, the Canada Revenue Agency (CRA) will implement a 10% late payment rate, an increase from the existing 9%. This is four percentage points higher than the recommended rate for late taxes compared to family loans. The prescribed interest rate for loans to family members, which was 5%, will increase to 6% based on the yields of Government of Canada for three-month Treasury Bills through October.
Interest assessed by the CRA on overdue payments is compounded daily. If the authorized rate for overdue taxes changes, the CRA will apply a different interest rate on current or overdue amounts each quarter. The prescribed interest rates for loans to family members began to rise in the third quarter of 2022 due to increased inflation. Prior to that, there had been a two-year statute of limitations on the prescribed rates for loans to family members, which were 1% and 5%, respectively. Stay tuned for updates on the CRA Prescribed Interest rate in 2024.