Section 12 – Social Programs and Benefits

Health Services Fund – Quebec

 

Employers

The employer HSF contribution rate is generally 1.75%18 for employers whose total worldwide annual payroll for all associated corporations is $1M or less. The rate is reduced to 1.25%19 for employers in the primary and manufacturing sectors.20 When the payroll exceeds $1M, the rate increases gradually up to 4.26% when the payroll reaches $5.5M in 2018.21 The payroll threshold for application of the 4.26% rate will be increased to $6M in 2019 and it will be raised again to $6.5M in 2021 and $7M as of 2022.22


18   Since August 16, 2018 (1.95% for the period from March 28, 2018 to August 15, 2018 and 2.30% before that date). Rate reduced to 1.7% in 2019 and 1.65% as of 2020.
19   Since August 16, 2018 (1.45% for the period from March 28, 2018 to August 15, 2018 and 1.50% before that date). .
20   Employers in the natural and applied sciences sectors may benefit from relief until 2020 with respect to the increase in payroll attributable to the hiring of specialized employees.
21   $5M before 2018.
22   Threshold indexed annually as of 2023.

Individuals

Every individual, other than a trust, resident in Quebec has to pay an HSF contribution. All of the individual’s income (i.e. business income earned in Quebec, pension income, property income and capital gains) is subject to the contribution except, among others, employment income, taxable support payments received, the grossed-up portion of dividends received from taxable Canadian corporations as well as any OAS benefits. Certain deductions can reduce the amount subject to the contribution. The contribution must be included in the calculation of instalments to be paid by individuals.

Income subject to contribution23 2018 contribution
$0 – $14,665
$14,666 – $29,665
$29,666 – $135,985
$135,986 and more
No contribution
1% of income > $14,665
$150 plus 1% of income > $50,985
$1,000

23 Indexed annually.

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