In 2017, Revenu Quebec reduced rates for the Quebec Health Services Fund (QHSF) to ease the burden on small- and medium-sized businesses. These rates decline incrementally over the next five years.

Who Qualifies for the QHSF Rate Reduction?

If your small business has a payroll under $5 million, you’re eligible for a rate reduction for payments toward the QHSF. Companies with a payroll above $5 million aren’t eligible for a rate reduction, and their rate remains at 4.26%.

The intent of the rate reductions towards the QHSF is to make small- and medium-sized businesses more competitive in Quebec. The manufacturing and primary sectors see even lower rates due to challenges faced by smaller companies in this industry against larger competitors.

How Much Is the QHSF Rate Reduction?

If your company’s total payroll is below $1 million and you’re in the primary and manufacturing sectors, your contribution decreases to 1.55% from 1.6%. If your company features a payroll between $1 million and $5 million in the primary and manufacturing sectors, the following formula determines the rate that you pay: 0.8725% + (0.6775 x S), where S is your total payroll in millions. So, a company with $3 million in payroll would pay a rate of 2.93%. Basically, the rate varies between 1.6% and 4.26% for companies of this payroll size.

Companies in all other sectors saw their contributions decrease from 2.7% to 2.5% in 2017. If your company is between $1 million and $5 million in payroll in all other sectors, the following formula determines the rate you pay: 2.06% + (0.44 x S), where S is total payroll in millions. So, a company with $3 million in payroll pays a rate of 3.38%. Rates vary between 2.5% and 4.26% for companies in this group.

As a small business owner, you know it’s important to meet your tax obligations, but that doesn’t mean that you need to pay more than is absolutely necessary. There are many deductions available for companies like yours. QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.