QUEBEC

Quebec runs more of its own tax and social programs than any other province, so a sole proprietor there deals with two tax administrations: the CRA for federal income tax and Revenu Québec for Quebec income tax, sales taxes and several payroll programs. This page sets out what is different for a sole proprietorship in Quebec: registration with the Registraire des entreprises, how GST and QST are handled, the Quebec tax return and contributions, the obligations that come with hiring employees, and the French-language rules. Figures are for 2026.

REGISTERING THE BUSINESS

• When registration is required: a sole proprietor who carries on business in Quebec under any name that does not include their own first and last name must register with the Registraire des entreprises du Québec.

• Quebec enterprise number (NEQ): registration gives the business a ten-digit NEQ, which is used with Quebec government departments.

• Annual updating declaration: registered enterprises must file an annual updating declaration to keep their information current, and pay the related fee.

• Revenu Québec accounts: QST, source deductions and other Quebec accounts are opened with Revenu Québec, usually at the same time as the federal business number.

GST AND QST

• Two taxes: sales in Quebec are generally subject to the 5% GST and the 9.975% Quebec sales tax (QST), for a combined rate of 14.975%.

• One administrator: for most businesses, Revenu Québec administers both GST and QST, so registration, returns and payments for both go to Revenu Québec rather than the CRA.

• Small supplier threshold: the same $30,000 test applies to QST registration as to GST.

• Input tax refunds: QST paid on business purchases is recovered as input tax refunds (ITRs), parallel to GST input tax credits, with some restrictions on items such as certain vehicles and fuel.

• Quick Method: a Quick Method is also available for QST, with its own remittance rates.

THE QUEBEC TAX RETURN

• Two returns: a Quebec resident files the federal T1 with the CRA and a separate Quebec return (TP-1) with Revenu Québec.

• Business income: reported on Form TP-80 on the Quebec return, alongside Form T2125 on the federal return. The rules are similar but not identical.

• Federal abatement: Quebec residents receive a 16.5% reduction in basic federal tax, because Quebec funds some programs itself.

• Separate instalments: Quebec income tax instalments are paid to Revenu Québec, separately from federal instalments paid to the CRA.

CONTRIBUTIONS ON SELF-EMPLOYMENT INCOME

• Quebec Pension Plan (QPP): replaces CPP for Quebec residents. Contributions on self-employment income are calculated on the Quebec return at rates slightly higher than CPP, with the same second-tier (QPP2) structure.

• Quebec Parental Insurance Plan (QPIP): self-employed people with at least $2,000 of self-employment income pay QPIP premiums and can receive maternity, paternity, parental and adoption benefits.

• Health Services Fund: individuals pay a contribution to the Health Services Fund on business and other non-employment income above a threshold, calculated on the Quebec return.

• Prescription drug insurance: residents not covered by a private plan pay a premium for the public prescription drug plan on their Quebec return.

HIRING EMPLOYEES IN QUEBEC

• Minimum wage: $16.60 an hour since May 1, 2026.

• Source deductions: Quebec income tax, QPP and QPIP are withheld and remitted to Revenu Québec, while federal income tax and EI (at a reduced Quebec rate) go to the CRA.

• Employer contributions: Health Services Fund contributions, the CNESST labour standards contribution and workplace health and safety premiums are payroll costs.

• Training: employers whose total payroll exceeds $2 million must spend at least 1% of payroll on training or contribute the difference.

• Year-end slips: Quebec RL-1 slips are issued alongside federal T4 slips by the end of February.

• Labour standards and pay equity: the Act respecting labour standards sets minimum conditions; businesses with 10 or more employees have pay equity obligations.

FRENCH-LANGUAGE REQUIREMENTS

• Business name: must have a French version, although a trademark in another language may be used in some cases.

• Signage and commercial documents: signs, product labels, invoices, receipts and contracts of adhesion must be available in French, with French at least as prominent as any other language on signs.

• Francization: businesses with 25 or more employees must register with the Office québécois de la langue française and follow a francization process.

KEY POINTS

• Two tax authorities: the CRA for federal income tax, Revenu Québec for Quebec tax, GST and QST.

• 14.975% combined sales tax: GST and QST registered and filed together with Revenu Québec.

• QPP and QPIP: replace CPP and add parental insurance premiums for the self-employed.

• French first: names, signs and commercial documents must meet the Charter of the French Language.

SOURCES

• Revenu Québec: Starting a business; GST and QST; Form TP-80; source deductions and employer contributions.

• Registraire des entreprises du Québec: registering a sole proprietorship; annual updating declaration.

• Quebec: Charter of the French Language; Act respecting labour standards; minimum wage effective May 1, 2026.