What are quarterly estimated tax payments?

They are advance payments of income and self-employment tax sent to the IRS (or CRA) four times a year, since no employer withholds taxes for freelancers or self-employed workers.

When are IRS estimated tax payments due?

Typically April 15, June 15, September 15, and January 15 of the following year. If those dates fall on a weekend or holiday, the deadline shifts to the next business day.

What happens if I miss a quarterly tax payment?

The IRS charges an underpayment penalty (currently around 7–8% annualized). You can avoid it by paying at least 90% of this year's tax or 100% of last year's tax (110% if income exceeds $150k).

How much should I set aside for quarterly taxes as a freelancer?

A common rule is 25–30% of every invoice for US freelancers (covering federal income tax plus 15.3% self-employment tax). In Canada, 25–35% depending on province and income bracket.

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Feb 12, 2026 · 4 min read

Quarterly Taxes: Stop Guessing, Start Calculating

If nobody takes taxes out of your paycheck, the government wants its money four times a year. Not once in April. Four times. And if you don't pay enough each quarter, they charge interest.

Due dates at a glance

🇺🇸 IRS

Q1Apr 15

Q2Jun 15

Q3Sep 15

Q4Jan 15*

*of the following year

🇨🇦 CRA

Q1Mar 15

Q2Jun 15

Q3Sep 15

Q4Dec 15

US: IRS estimated payments

The simplest safe harbor: pay 100% of last year's tax liability, split into four equal payments. Even if you owe more this year, you won't get penalized. If your AGI was over $150K last year, the threshold is 110%.

Pay via IRS Direct Pay or EFTPS. Use Form 1040-ES if you want to do it by mail (you don't want to do it by mail).

Canada: CRA tax instalments

The CRA sends you an instalment reminder if they think you'll owe more than $3,000 in net tax ($1,800 in Quebec). You can follow their suggested amounts or calculate your own based on current-year income.

The actual formula

It's not complicated. Here's the rough version:

Estimate your annual net income (revenue minus expenses)
Apply your tax rate (use the Profit Calculator)
Divide by 4
Pay that amount each quarter

Update the estimate each quarter as you learn more about how the year is going. Had a great Q2? Bump up Q3's payment. Slow Q4? Adjust down.

What happens if you don't pay

US: The underpayment penalty is essentially interest on the amount you should have paid. Currently around 7-8% annualized. Not catastrophic, but unnecessary.

Canada: Instalment interest is compounded daily at the prescribed rate. If you owe more than $2 in interest, they charge it.

Neither will put you in jail. Both will cost you money you didn't need to spend.

Set it up once

Schedule four calendar reminders. Calculate the number. Set up autopay if your platform allows it. Done. The worst approach is ignoring it until April and writing one large, painful check.

Related tool

Profit & Tax Calculator

Estimate your quarterly payment amount from revenue and expenses.

This isn't tax advice. Talk to a tax professional about your specific situation.