In its provincial budget on March 17, the Quebec government announced it will cut the Quebec Health Services Fund (QHSF) contribution rate for employers with a payroll of $1 million or less.
The change, which will be gradually reduced by 2021, is aimed at helping small and medium-sized businesses (SMBs) with growth and job creation.
Effective Jan. 1, 2017, the contribution rate will be decreased from 1.6% to 1.45% for the primary and manufacturing sectors, and 2.7% to 2% for the service and construction sectors.
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“With the other decreases in the HSF contribution already announced by our government, the reduction in the tax burden on SMBs will ultimately reach $385 million annually,” said Quebec’s Minister of Finance Carlos Leitão in a news release.
Quebec’s personal health contribution was scheduled to be eliminated from the tax table calculations as of 2019 with a gradual reduction beginning in 2017, according to the Canadian Payroll Association (CPA).
The budget announced that this elimination will be expedited by an immediate reduction, retroactively effective to January 2016.
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“Thanks to consistent advocacy by the Canadian Payroll Association and its co-development with Revenu Québec of an Implementation Deadlines process, the Quebec government has agreed to more effective and efficient implementation using the July 1, 2016 tax tables rather than an off-cycle publication,” said the CPA.
For 2016, the maximum health contribution will be:
- Reduced to $50 (from $100) for incomes of $41,265 or less (level 1);
- Reduced to $175 (from $200) for incomes of $41,265 to $134,095 (level 2); and
- Maintained at $1,000 for incomes over $134,095 (level 3).
For 2017, the maximum health contribution will be:
- Reduced to zero for level 1 incomes;
- Reduced to $70 for level 2 incomes; and
- Reduced to $800 for level 3 incomes.
For 2018, the personal health contribution will be completely eliminated for all income levels.
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