Paying income taxes with a credit card

The Canada Revenue Agency (CRA) encourages taxpayers to go digital, allowing us to file taxes via tax software (practiced by 80% of Canadians) and receive refunds via direct deposit. This benefits all parties involved, since filing your taxes is usually easier and more accurate with software compared to doing it by hand, and refunds are deposited much faster via direct deposit as opposed to getting a cheque.

But despite this seemingly streamlined method of filing, Canadian taxpayers are often let down by the fact that although it’s relatively easy to pay directly from a bank account, paying taxes with a credit card is a bit more convoluted. The process involves going through a third-party service provider such as Plastiq or PaySimply, both of which charge convenience fees. But paying with a credit card may still be optimal in some circumstances even after factoring in the third-party payment fee. Take a look at all the options available before you make a decision about how to pay.