The Canada Revenue Agency (CRA) announced the prescribed annual interest rates that will apply to all amounts owed to the CRA and all amounts owed by the CRA to individuals and corporations. These rates will be effective from October 1 to December 31, 2025.
- The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will remain at seven (7) per cent.
- The interest rate for corporate taxpayers' overpayments will remain at three (3) per cent.
- The interest rate for non-corporate taxpayers' overpayments will remain at five (5) per cent.
- The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will remain at three (3) per cent.
Employers who offer certain taxable benefits, such as low or no-interest employee loans, must calculate the associated taxable benefit amounts. This calculation must be based on the current government-prescribed interest rate to determine the value of the employee's benefit from the loan. Employers must stay updated with changes in the prescribed interest rate to maintain accurate and compliant benefit calculations.