Red roofed stone houses and shops along a street in Old Québec

Provincial tax

Quebec Business Tax Rates for 2026

Quebec business taxes for 2026: the separate CO-17 return, the small business rate change, GST with QST, QPP, QPIP and the health services fund.

Sources checked October 20264 min read

Key points

11.2% combined on the first $500,000 of active business income, down from 12.2% on tax years that began before April 30, 2026
26.5% combined general corporate rate
5% GST and 9.975% QST, usually on one return with Revenu Québec
Separate Quebec returns: CO-17 for corporations, TP-1 for individuals

One

Corporate tax rates in Quebec

Quebec collects its own corporate income tax. A corporation with an establishment in Quebec files the CO-17 with Revenu Québec as well as the federal T2, and pays Quebec tax at 11.5% unless it qualifies for the small business deduction.

For tax years that begin after April 29, 2026, the deduction brings the Quebec rate down to 2.2% on the first $500,000, from 3.2% before. With federal tax the floor is 11.2%, and the general combined rate is 26.5%.

The full deduction is far from automatic. Quebec phases it out for a corporation whose employees worked fewer than 5,500 paid hours, unless its activity is mainly in the primary or manufacturing sectors. A one person consulting company rarely gets there, which is why many small Quebec corporations pay the full 11.5%.

Quebec corporate rates for 2026, with the federal 9% and 15% added. Source: Revenu Québec and the CRA.
Rate	Quebec	With federal tax
Small business rate on tax years that began before April 30, 2026	3.2%	12.2%
Small business rate after the change	2.2%	11.2%
General rate	11.5%	26.5%
Income the small business rate covers	$500,000	Same federal limit

A green fronted café with flower boxes on a cobblestone street in Old Montréal

Two

Sales tax in Quebec

Quebec charges 9.975% QST beside the 5% GST, 14.975% in total. Revenu Québec administers both taxes for most businesses in the province, so a Quebec registrant usually files one combined GST and QST return with Revenu Québec and does not deal with the CRA for GST at all.

Unlike the provincial sales taxes in the West, QST works the way GST does: registrants claim input tax refunds for the QST they pay on business purchases.

Three

Quebec income tax brackets for 2026

Quebec residents file two personal returns, the federal T1 and the Quebec TP-1 with Revenu Québec. Quebec's 2026 rates run from 14% to 25.75% on income above $132,245.

Federal tax is lower for Quebec residents than for anyone else, because the Quebec abatement takes 16.5% off basic federal tax. Even so, the combined top rate is 53.305%.

Quebec income tax brackets for 2026. Federal tax is charged as well. Source: Revenu Québec.
Taxable income from	Up to	Rate
$0	$54,345	14%
$54,345.01	$108,680	19%
$108,680.01	$132,245	24%
$132,245.01	No upper limit	25.75%

Four

Payroll costs in Quebec

Quebec payroll has more lines than anywhere else. The Quebec Pension Plan replaces CPP, at 6.3% each from employer and employee on earnings up to $74,600, a maximum of $4,479.30 each, plus 4% on earnings between $74,600 and $85,000.

The Quebec Parental Insurance Plan adds 0.602% for the employer and 0.43% for the employee on earnings up to $103,000, which is why EI costs less in Quebec, at 1.3% for employees.

Employers also pay the health services fund contribution. For 2026 the rate is 1.65% when total payroll is $1,000,000 or less, or 1.25% in the primary and manufacturing sectors, and it rises with payroll until it reaches 4.26% at $7,800,000. Workplace insurance runs through the CNESST, and employers pay a small contribution related to labour standards as well.

Five

Two agencies, two sets of slips

Employers in Quebec issue RL-1 slips for Revenu Québec as well as T4 slips for the CRA, and remit Quebec source deductions to Revenu Québec on their own schedule.

For a business based outside Quebec with staff or customers there, the practical result is a second set of registrations, accounts and deadlines. It is manageable, but it needs to be planned rather than discovered.

Six

Quebec questions, answered

What is the small business tax rate in Quebec in 2026?

As low as 11.2% combined for tax years that begin after April 29, 2026, if the corporation qualifies for the full Quebec deduction. Many small corporations do not, because of the paid hours test, and pay 20.5% instead.

Does a Quebec business file GST with the CRA?

Usually not. Revenu Québec administers the GST in Quebec for most businesses, alongside the QST, often on one combined return.

What replaces CPP in Quebec?

The Quebec Pension Plan, at 6.3% each for employer and employee on earnings up to $74,600 in 2026.

Seven

More for Quebec businesses

Official sources

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Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.