On November 27, 2025, Revenu Québec published the 2026 Formulas to calculate source deductions and contributions. This guide outlines how to calculate source deductions for Quebec income tax, Quebec Pension Plan (QPP), Quebec Pparental Insurance Plan (QPIP), and employer contributions.
The 2026 changes include the following:
- Indexing – Personal income tax indexed at 2.05%
- Income tax rates and income remain unchanged
- The personal basic amount increased to $18,952
- Amount for career extension will be indexed annually
- Gratuities and retroactive pay at $18,952
- Deduction for workers at $1,450
- Emergency services volunteer at $1,450
- Disability assistance payments from a registered disability savings plan (taxed at a rate of 14% for the taxable portion exceeding $23,160
- Elimination of deductions for certain foreign individuals and for sailors engaged in international freight transportation
- Cooperative investment plan deduction (CIP) has decreased from 125% to 100%
- The Quebec Pension Plan Contribution rate has decreased from 6.40% to 6.30%
- The Quebec Parental Insurance Plan premium rate has decreased from 0.494% to 0.430% (for employees) and from 0.692% to 0.602% for employers
- The Contribution to the health service fund threshold will remain at $7.8M.
Employers should:
- Review the new guide and ensure changes will be integrated into payroll processes.
- Ensure systems and policies align with updated deduction formulas.