While the province of Quebec is a part of Canada, its laws and government function quite differently than the rest of the country. This can create challenges for companies that employ workers from Quebec, when it comes to global payroll processes, taxes, benefits, and more.
One particular thing that Quebec does differently is payroll deductions for provincial healthcare and social services, otherwise known as the Quebec Health Services Fund.
This article will provide an overview of what the Quebec Health Services Fund is and what it means for you as an employer.
What Is the Quebec Health Services Fund?
Quebec’s Health Services Fund uses money paid by employers and employees living in Quebec to help fund the province’s healthcare and social services. For employees, a percentage of all paychecks is deducted, with the rate determined by the worker’s salary. Employers must also pay into the Health Care Services Fund at a rate that is determined by how much money the company pays annually out in salaries.
How Much Is Paid Into the Health Services Fund?
Both employers and employees in the province of Quebec must pay into the Health Services fund. For employees, deductions are made to their paychecks using rates from Revenue Québec that are based on an employee's gross income.
Here is what employees living in Quebec must pay annually to the Quebec Health Services Fund based on their income:
- $0 – $15,765 gross income: No contribution required
- 15,765 – $30,765: 1% of income
- $30,765 – $54,820: $150
- $54,820 – $139,820: $150 plus 1% of income
- $139,820 and higher: $1,000
For employers, their contribution is calculated by taking the gross salaries paid to employees and multiplying this figure by their applicable contribution rate. A company’s contribution rate is also determined by its total annual payroll and business sector.
Here are Revenue Québec’s 2023 contribution rates for businesses:
Rates for employers with over 50% of payroll going towards primary and manufacturing sectors
- Total Payroll of Less Than $1,000,000: 1.25
- Total Payroll Between $1,000,001 and $7,199,999: 0.7645 + (0.4855 × TP/1,000,000)
- Total Payroll of $7,200,000 and higher: 4.26
Rates for all employers (except for public sector employers and employers with more than 50% of payroll allocated to primary and manufacturing sectors)
- Total Payroll of Less Than $1,000,000: 1.65
- Total Payroll Between $1,000,001 and $7,199,999: 1.2290 + (0.4210 × TP/1,000,000)
- Total Payroll of $7,200,000 and higher: 4.26
Public sector employer rates
- Total Payroll of Less Than $1,000,000: 4.26
- Total Payroll Between $1,000,001 and $7,199,999: 4.26
- Total Payroll of $7,200,000 and higher: 4.26
Other Quebec Payroll Deductions to Keep in Mind
In Quebec, the Health Services Fund isn’t the only thing employers and employees must pay into.
Quebec employers must also:
- Contribute to the Commission des normes du travail, de l’équité, de la santé et de la sécurité du travail (CNESST)
- Contribute $0.07 for every $100 of insurable payroll to Quebec’s labour standards
- Contribute on average $1.77 for every $100 of payroll to the occupational health and safety plan
How Borderless Can Help You Navigate Quebec’s Complex Tax & Employment Laws
As you can tell, employing a team of staff based in the Canadian province of Quebec can be incredibly challenging due to the unique laws and requirements of both employers and employees. But it doesn’t have to be this way.
If you are a company based outside of Canada that is looking to hire staff from Quebec, consider working with an Employer of Record like Borderless.
Borderless is an Employer of Record service provider that is set up to help manage employees in over 170 countries. Our EOR and PEO platform is designed to help companies like yours manage workers in Quebec and beyond while ensuring you are fully compliant with local tax and employment laws.
Ready to get started? Contact our team at Borderless today to set up a demo and learn more about us.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
