CRA prescribed interest rates
The rate CRA uses for spousal loans, shareholder loans, overdue taxes, and refund interest — updated each quarter based on 90-day T-bill yields.
Basic prescribed rate
3%
2026 Q2
Overdue tax interest
7%
Basic + 4%
Refund interest
5%
Basic + 2%
Why the prescribed rate matters
Spousal loans for income splitting
You can lend money to a lower-income spouse or common-law partner at the prescribed rate. The investment income is then taxed in their hands — often at a much lower rate. The loan must be documented, and your spouse must pay the interest by January 30 each year. If you lock in the rate today, it stays fixed for the life of the loan even if rates rise later.
Shareholder loans from a corporation
If your corporation lends you money or pays your personal expenses, it must charge at least the prescribed rate of interest — or the difference is a taxable employment benefit to you. This applies to loans, use of corporate assets, and interest-free advances.
Interest on late tax payments
If you owe CRA money after the April 30 deadline, interest accrues daily at the prescribed rate plus 4%. At the current rate of 3%, that's 7% annually — higher than most lines of credit. Pay on time or set up a payment arrangement.
Interest on overpayments (refunds)
If CRA owes you a refund and takes longer than 45 days to process it after you file (30 days for an early filing), they pay you interest at the prescribed rate plus 2% — currently 5%.
Rate history — 2020 to present
| Quarter | Basic rate | Overdue tax | Refund interest |
|---|---|---|---|
| 2026 Q2 | 3% | 7% | 5% |
| 2026 Q1 | 3% | 7% | 5% |
| 2025 Q4 | 3% | 7% | 5% |
| 2025 Q3 | 3% | 7% | 5% |
| 2025 Q2 | 3% | 7% | 5% |
| 2025 Q1 | 4% | 8% | 6% |
| 2024 Q4 | 4% | 8% | 6% |
| 2024 Q3 | 5% | 9% | 7% |
| 2024 Q2 | 6% | 10% | 8% |
| 2024 Q1 | 6% | 10% | 8% |
| 2023 Q4 | 6% | 10% | 8% |
| 2023 Q3 | 6% | 10% | 8% |
| 2023 Q2 | 5% | 9% | 7% |
| 2023 Q1 | 4% | 8% | 6% |
| 2022 Q4 | 3% | 7% | 5% |
| 2022 Q3 | 2% | 6% | 4% |
| 2022 Q2 | 1% | 5% | 3% |
| 2022 Q1 | 1% | 5% | 3% |
| 2021 Q4 | 1% | 5% | 3% |
| 2021 Q3 | 1% | 5% | 3% |
| 2021 Q2 | 1% | 5% | 3% |
| 2021 Q1 | 1% | 5% | 3% |
| 2020 Q4 | 1% | 5% | 3% |
| 2020 Q3 | 1% | 5% | 3% |
| 2020 Q2 | 2% | 6% | 4% |
| 2020 Q1 | 2% | 6% | 4% |
The basic prescribed rate is set quarterly based on the average yield of 90-day Government of Canada T-bills for the first month of the preceding quarter, rounded up to the nearest whole percent. Source: CRA — Prescribed interest rates. 2026 Q2 and later are estimates based on Bank of Canada rate trajectory.