Revenu Québec Infos

Generally, the tax on insurance premiums (TIP) applies to premiums paid for insurance of persons provided under a group insurance plan or a private-sector uninsured social benefits plan. It does not usually apply to premiums for individual policies of insurance of persons.

Since the individual insurance contracts referred to in section 42.2 of the Act respecting prescription drug insurance (APDI) are comparable to group insurance contracts, the TIP system will be changed so that all the premiums payable under such contracts will receive equivalent tax treatment.

Therefore, premiums for individual policies of insurance of persons that are payable under any individual insurance contracts referred to in section 42.2 of the APDI will be subject to the TIP when they are paid on or after January 1, 2016.

Individual insurance contracts referred to in section 42.2 of the APDI

Section 42.2 of the APDI provides that where a private plan consists of an individual policy of insurance of persons, such a policy must include coverage at least equivalent to the basic prescription drug insurance plan coverage if the policy meets the following conditions:

• It is offered to persons eligible for the basic prescription drug insurance plan who are part of a group with private coverage in accordance with section 15.1 of the APDI.
• It includes coverage for accident, illness or disability. 
• It has one or more of the distinctive characteristics of group insurance.

Remittance of the TIP

If you are not required to remit such a premium to another person or if you are required to remit it to a person who is not a registrant for purposes of the TIP, you will be required to remit the tax collected in respect of the premium to us. In other cases, you will be required to remit the tax, at the same time as the premium, to the person to whom you are required to remit the premium.

If you are required to remit the tax to us and you are not a registrant for purposes of the TIP, you must register for the tax either:

• by using our Registering for Revenu Québec Files online service;
• by completing form LM-1-V, Application for Registration; or
• by contacting us.

Generally, the tax on insurance premiums (TIP) applies to premiums paid for insurance of persons provided under a group insurance plan or a private-sector uninsured social benefits plan. It does not usually apply to premiums for individual policies of insurance of persons. 

Since the individual insurance contracts referred to in section 42.2 of the Act respecting prescription drug insurance (APDI) are comparable to group insurance contracts, the TIP system will be changed so that all the premiums payable under such contracts will receive equivalent tax treatment.

Therefore, premiums for individual policies of insurance of persons that are payable under any individual insurance contracts referred to in section 42.2 of the APDI will be subject to the TIP when they are paid on or after January 1, 2016.

Individual insurance contracts referred to in section 42.2 of the APDI

Section 42.2 of the APDI provides that where a private plan consists of an individual policy of insurance of persons, such a policy must include coverage at least equivalent to the basic prescription drug insurance plan coverage if the policy meets the following conditions:

• It is offered to persons eligible for the basic prescription drug insurance plan who are part of a group with private coverage in accordance with section 15.1 of the APDI.
• It includes coverage for accident, illness or disability. 
• It has one or more of the distinctive characteristics of group insurance.

Remittance of the TIP

If you are not required to remit such a premium to another person or if you are required to remit it to a person who is not a registrant for purposes of the TIP, you will be required to remit the tax collected in respect of the premium to us. In other cases, you will be required to remit the tax, at the same time as the premium, to the person to whom you are required to remit the premium. 

If you are required to remit the tax to us and you are not a registrant for purposes of the TIP, you must register for the tax either:

• by using our Registering for Revenu Québec Files online service;
• by completing form LM-1-V, Application for Registration; or
• by contacting us.

For 2016, if you make disability assistance payments to a beneficiary of a registered disability savings plan (RDSP) who is resident in Canada, you must withhold income tax at a rate of 16% from the taxable portion of the payments that exceeds $14,175 for the year.

For 2016, if you make disability assistance payments to a beneficiary of a registered disability savings plan (RDSP) who is resident in Canada, you must withhold income tax at a rate of 16% from the taxable portion of the payments that exceeds $14,175 for the year.

For 2016, if you make disability assistance payments to a beneficiary of a registered disability savings plan (RDSP) who is resident in Canada, you must withhold income tax at a rate of 16% from the taxable portion of the payments that exceeds $14,175 for the year.

For 2016, if you make disability assistance payments to a beneficiary of a registered disability savings plan (RDSP) who is resident in Canada, you must withhold income tax at a rate of 16% from the taxable portion of the payments that exceeds $14,175 for the year.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction decreased from 25% to 20%. On June 1, 2016, the rate will further decrease to 15%.

If an employee authorizes you to withhold an amount on his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is acquired.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 75% (rather than 100%) of the amount deducted from the employee's remuneration for the purchase of class A or class B shares issued by Fondaction.

If you use the formulas in the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to determine the amount of income tax to withhold, you must take into account the changes to the formulas. For more information, refer to the guide.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction decreased from 25% to 20%. On June 1, 2016, the rate will further decrease to 15%.

If an employee authorizes you to withhold an amount on his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is acquired.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 75% (rather than 100%) of the amount deducted from the employee's remuneration for the purchase of class A or class B shares issued by Fondaction.

If you use the formulas in the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to determine the amount of income tax to withhold, you must take into account the changes to the formulas. For more information, refer to the guide.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction decreased from 25% to 20%. On June 1, 2016, the rate will further decrease to 15%.

If an employee authorizes you to withhold an amount on his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is acquired.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 75% (rather than 100%) of the amount deducted from the employee's remuneration for the purchase of class A or class B shares issued by Fondaction.

If you use the formulas in the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to determine the amount of income tax to withhold, you must take into account the changes to the formulas. For more information, refer to the guide.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction decreased from 25% to 20%. On June 1, 2016, the rate will further decrease to 15%.

If an employee authorizes you to withhold an amount on his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is acquired.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 75% (rather than 100%) of the amount deducted from the employee's remuneration for the purchase of class A or class B shares issued by Fondaction.

If you use the formulas in the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to determine the amount of income tax to withhold, you must take into account the changes to the formulas. For more information, refer to the guide.

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Below are the changes made to the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) for 2016.

Variable E

The indexation factor used to calculate the value of personal tax credits for 2016 is 1.09%.

Variables H, H1 and H2 – Deduction for employment income

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016. Consequently, the maximum amount of variables H, H1 and H2 has been increased from $1,120 to $1,130.

Variable K – The constant for adjusting the income tax rate

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically,

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935); 
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865); 
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040); 
• the 25.75% rate applies to taxable income of more than $103,150. 

The values of variable K are therefore $1,695 (increased from $1,677), $5,086 (increased from $5,032) and $6,891 (increased from $6,817).

Variable M – Québec Pension Plan

The QPP contribution rate has been increased from 10.50% to 10.65% for 2016, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer.

In addition, the maximum pensionable earnings for the purposes of the QPP have been increased from $53,600 to $54,900. Variable M has therefore been increased from $2,630.25 to $2,737.05.

Variables N and N1 – Québec parental insurance plan

The maximum insurable earnings subject to QPIP premiums have been increased from $70,000 to $71,500 for 2016.The employee premium rate is reduced from 0.559% to 0.548%, and the employer premium rate is reduced from 0.782% to 0.767%. As a result, variable N is $391.82 (instead of $391.30) and variable N1 is $548.41 (instead of $547.40).

Variables Y, Y1 to Y4, Q and Q1 – Shares in Fondaction and in the Fonds de solidarité des travailleurs du Québec

Effective June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction is 20%. On June 1, 2016, the rate will be reduced to 15%.

If your employee authorizes you to withhold an amount from his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is purchased. See the table below for the changes to be made to certain formulas.

Calculation of the income tax for a pay period in which a share is acquiredA
Share acquired before June 1, 2016B
Share acquired after May 31, 2016Regular paymentsY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + ZY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) + ZGratuities, retroactive pay or similar lump-sum paymentsY1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z1Y1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) + Z1Y2 = [T × (I1 + B1 + B2)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z2Y2 = [T × (I1 + B1 + B2)] – K – K1 – (0.20 × E) −(0.15 × P × Q) + Z2Cumulative averageFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + ZFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + ZSecond Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z3Second Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z3Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z4Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z4DefinitionsQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQ or amount withheld for the pay period for the purchase, after May 31, 2016, of class A or class B shares in FondactionQ1 = amount withheld for the pay period for the purchase, before June 1, 2016, of class A or class B shares in FondactionNote

The total value of variables Q and Q1 must not exceed $5,000 for the year. For the pay period in which the annual maximum is reached, the value of variables Q and Q1 must be zero.

Variable Z – Health contribution

For 2016, the rates and the amounts used to calculate the value of the health contribution (variable Z) remain unchanged. However, the net income thresholds have been indexed.

Estimated annual net income (R)
Health contribution (Z)$18,570 or less$0More than $18,570, no more than $41,265Whichever is less:

• $100 
• 5% × (R − $18,570) 

More than $41,265, no more than $134,095Whichever is less:

• $200 
• $100 + [5% × (R − $41,265)] 

More than $134,095Whichever is less:

• $1,000 
• $200 + [4% × (R − $134,095)] 

Below are the changes made to the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) for 2016.

Variable E

The indexation factor used to calculate the value of personal tax credits for 2016 is 1.09%.

Variables H, H1 and H2 – Deduction for employment income

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016. Consequently, the maximum amount of variables H, H1 and H2 has been increased from $1,120 to $1,130.

Variable K – The constant for adjusting the income tax rate

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically,

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935); 
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865); 
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040); 
• the 25.75% rate applies to taxable income of more than $103,150. 

The values of variable K are therefore $1,695 (increased from $1,677), $5,086 (increased from $5,032) and $6,891 (increased from $6,817).

Variable M – Québec Pension Plan

The QPP contribution rate has been increased from 10.50% to 10.65% for 2016, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer.

In addition, the maximum pensionable earnings for the purposes of the QPP have been increased from $53,600 to $54,900. Variable M has therefore been increased from $2,630.25 to $2,737.05.

Variables N and N1 – Québec parental insurance plan

The maximum insurable earnings subject to QPIP premiums have been increased from $70,000 to $71,500 for 2016.The employee premium rate is reduced from 0.559% to 0.548%, and the employer premium rate is reduced from 0.782% to 0.767%. As a result, variable N is $391.82 (instead of $391.30) and variable N1 is $548.41 (instead of $547.40).

Variables Y, Y1 to Y4, Q and Q1 – Shares in Fondaction and in the Fonds de solidarité des travailleurs du Québec

Effective June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction is 20%. On June 1, 2016, the rate will be reduced to 15%.

If your employee authorizes you to withhold an amount from his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is purchased. See the table below for the changes to be made to certain formulas.

Calculation of the income tax for a pay period in which a share is acquiredA
Share acquired before June 1, 2016B
Share acquired after May 31, 2016Regular paymentsY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + ZY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) + ZGratuities, retroactive pay or similar lump-sum paymentsY1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z1Y1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) + Z1Y2 = [T × (I1 + B1 + B2)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z2Y2 = [T × (I1 + B1 + B2)] – K – K1 – (0.20 × E) −(0.15 × P × Q) + Z2Cumulative averageFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + ZFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + ZSecond Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z3Second Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z3Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z4Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z4DefinitionsQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQ or amount withheld for the pay period for the purchase, after May 31, 2016, of class A or class B shares in FondactionQ1 = amount withheld for the pay period for the purchase, before June 1, 2016, of class A or class B shares in FondactionNote

The total value of variables Q and Q1 must not exceed $5,000 for the year. For the pay period in which the annual maximum is reached, the value of variables Q and Q1 must be zero.

Variable Z – Health contribution

For 2016, the rates and the amounts used to calculate the value of the health contribution (variable Z) remain unchanged. However, the net income thresholds have been indexed.

Estimated annual net income (R)
Health contribution (Z)$18,570 or less$0More than $18,570, no more than $41,265Whichever is less:

• $100 
• 5% × (R − $18,570) 

More than $41,265, no more than $134,095Whichever is less:

• $200 
• $100 + [5% × (R − $41,265)] 

More than $134,095Whichever is less:

• $1,000 
• $200 + [4% × (R − $134,095)] 

Below are the changes made to the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) for 2016.

Variable E

The indexation factor used to calculate the value of personal tax credits for 2016 is 1.09%.

Variables H, H1 and H2 – Deduction for employment income

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016. Consequently, the maximum amount of variables H, H1 and H2 has been increased from $1,120 to $1,130.

Variable K – The constant for adjusting the income tax rate

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically,

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935); 
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865); 
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040); 
• the 25.75% rate applies to taxable income of more than $103,150. 

The values of variable K are therefore $1,695 (increased from $1,677), $5,086 (increased from $5,032) and $6,891 (increased from $6,817).

Variable M – Québec Pension Plan

The QPP contribution rate has been increased from 10.50% to 10.65% for 2016, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer.

In addition, the maximum pensionable earnings for the purposes of the QPP have been increased from $53,600 to $54,900. Variable M has therefore been increased from $2,630.25 to $2,737.05.

Variables N and N1 – Québec parental insurance plan

The maximum insurable earnings subject to QPIP premiums have been increased from $70,000 to $71,500 for 2016.The employee premium rate is reduced from 0.559% to 0.548%, and the employer premium rate is reduced from 0.782% to 0.767%. As a result, variable N is $391.82 (instead of $391.30) and variable N1 is $548.41 (instead of $547.40).

Variables Y, Y1 to Y4, Q and Q1 – Shares in Fondaction and in the Fonds de solidarité des travailleurs du Québec

Effective June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction is 20%. On June 1, 2016, the rate will be reduced to 15%.

If your employee authorizes you to withhold an amount from his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is purchased. See the table below for the changes to be made to certain formulas.

Calculation of the income tax for a pay period in which a share is acquiredA
Share acquired before June 1, 2016B
Share acquired after May 31, 2016Regular paymentsY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + ZY = (T × I) − K − K1 − (0.20 × E) −(0.15 × P × Q) + ZGratuities, retroactive pay or similar lump-sum paymentsY1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z1Y1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) −(0.15 × P × Q) + Z1Y2 = [T × (I1 + B1 + B2)] − K − K1 − (0.20 × E) −(0.15 × P × Q) − (0.20 × P × Q1) + Z2Y2 = [T × (I1 + B1 + B2)] – K – K1 – (0.20 × E) −(0.15 × P × Q) + Z2Cumulative averageFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + ZFirst method Y = (T × I) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + ZSecond Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z3Second Method Y3 = (T × I3) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z3Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z4Y4 = (T × I4) − K − K1 − (0.20 × E) −(0.15 × S1 × Q) + Z4DefinitionsQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQQ = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQ or amount withheld for the pay period for the purchase, after May 31, 2016, of class A or class B shares in FondactionQ1 = amount withheld for the pay period for the purchase, before June 1, 2016, of class A or class B shares in FondactionNote

The total value of variables Q and Q1 must not exceed $5,000 for the year. For the pay period in which the annual maximum is reached, the value of variables Q and Q1 must be zero.

Variable Z – Health contribution

For 2016, the rates and the amounts used to calculate the value of the health contribution (variable Z) remain unchanged. However, the net income thresholds have been indexed.

Estimated annual net income (R)
Health contribution (Z)$18,570 or less$0More than $18,570, no more than $41,265Whichever is less:

• $100 
• 5% × (R − $18,570) 

More than $41,265, no more than $134,095Whichever is less:

• $200 
• $100 + [5% × (R − $41,265)] 

More than $134,095Whichever is less:

• $1,000 
• $200 + [4% × (R − $134,095)] 

Below are the changes made to the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) for 2016.

Variable E

The indexation factor used to calculate the value of personal tax credits for 2016 is 1.09%.

Variables H, H1 and H2 – Deduction for employment income

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016. Consequently, the maximum amount of variables H, H1 and H2 has been increased from $1,120 to $1,130.

Variable K – The constant for adjusting the income tax rate

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically,

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935); 
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865); 
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040); 
• the 25.75% rate applies to taxable income of more than $103,150. 

The values of variable K are therefore $1,695 (increased from $1,677), $5,086 (increased from $5,032) and $6,891 (increased from $6,817).

Variable M – Québec Pension Plan

The QPP contribution rate has been increased from 10.50% to 10.65% for 2016, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer.

In addition, the maximum pensionable earnings for the purposes of the QPP have been increased from $53,600 to $54,900. Variable M has therefore been increased from $2,630.25 to $2,737.05.

Variables N and N1 – Québec parental insurance plan

The maximum insurable earnings subject to QPIP premiums have been increased from $70,000 to $71,500 for 2016.The employee premium rate is reduced from 0.559% to 0.548%, and the employer premium rate is reduced from 0.782% to 0.767%. As a result, variable N is $391.82 (instead of $391.30) and variable N1 is $548.41 (instead of $547.40).

Variables Y, Y1 to Y4, Q and Q1 – Shares in Fondaction and in the Fonds de solidarité des travailleurs du Québec

Effective June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction is 20%. On June 1, 2016, the rate will be reduced to 15%.

If your employee authorizes you to withhold an amount from his or her remuneration for the purchase, after May 31, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax for each pay period in which such a share is purchased. See the table below for the changes to be made to certain formulas.

Calculation of the income tax for a pay period in which a share is acquired A
Share acquired before June 1, 2016 B
Share acquired after May 31, 2016 Regular payments Y = (T × I) − K − K1 − (0.20 × E) − (0.15 × P × Q) − (0.20 × P × Q1) + Z Y = (T × I) − K − K1 − (0.20 × E) − (0.15 × P × Q) + Z Gratuities, retroactive pay or similar lump-sum payments Y1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) − (0.15 × P × Q) − (0.20 × P × Q1) + Z1 Y1 = [T × (I1 + B1)] − K − K1 − (0.20 × E) − (0.15 × P × Q) + Z1 Y2 = [T × (I1 + B1 + B2)] − K − K1 − (0.20 × E) − (0.15 × P × Q) − (0.20 × P × Q1) + Z2 Y2 = [T × (I1 + B1 + B2)] – K – K1 – (0.20 × E) − (0.15 × P × Q) + Z2 Cumulative average First method Y = (T × I) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z First method Y = (T × I) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) + Z Second Method Y3 = (T × I3) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z3 Second Method Y3 = (T × I3) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) + Z3 Y4 = (T × I4) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) − (0.20 × S1 × Q1) + Z4 Y4 = (T × I4) − K − K1 − (0.20 × E) − (0.15 × S1 × Q) + Z4 Definitions Q = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQ Q = amount withheld for a pay period for the purchase of class A shares in the Fonds de solidarité FTQ or amount withheld for the pay period for the purchase, after May 31, 2016, of class A or class B shares in Fondaction Q1 = amount withheld for the pay period for the purchase, before June 1, 2016, of class A or class B shares in Fondaction Note

The total value of variables Q and Q1 must not exceed $5,000 for the year. For the pay period in which the annual maximum is reached, the value of variables Q and Q1 must be zero.

Variable Z – Health contribution

For 2016, the rates and the amounts used to calculate the value of the health contribution (variable Z) remain unchanged. However, the net income thresholds have been indexed.

Estimated annual net income (R)
Health contribution (Z) $18,570 or less $0 More than $18,570, no more than $41,265 Whichever is less:

• $100 
• 5% × (R − $18,570) 

More than $41,265, no more than $134,095 Whichever is less:

• $200 
• $100 + [5% × (R − $41,265)] 

More than $134,095 Whichever is less:

• $1,000 
• $200 + [4% × (R − $134,095)] 

The rates, thresholds and amounts applicable to source deductions and contributions for 2016 are described below.

Indexation for 2016 

Every year, the personal income tax system is automatically indexed. The indexation rate for 2016 is 1.09%.

Income tax rates and income thresholds 

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically:

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935);
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865);
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040);
• the 25.75% rate applies to taxable income of more than $103,150.

Source Deductions Return (form TP-1015.3-V)

The Source Deductions Return (form TP-1015.3-V) has been revised for 2016 to take into account the indexation of the amounts appearing on it.

The indexed amounts used to determine deduction codes for 2016 are shown in the table below. The figures for 2015 are provided for information purposes.

Amounts to calculate source deductions20162015Basic amount$11,550$11,425Amount transferred from one spouse to the other$11,550$11,425Amount for other dependants who are 18 or older$3,100$3,065Amount for a child under 18 enrolled in post-secondary studies$2,130$2,105Additional amount for a person living alone (single-parent family)$1,675$1,655Amount for a severe and prolonged impairment in mental or physical functions$2,625$2,595Amount for a person living alone$1,355$1,340Age amount$2,485$2,460Amount for retirement income$2,210$2,185Reduction threshold used to calculate the net family income (This income is used to calculate the age amount, the amount for a person living alone and the amount for retirement income.) $33,505$33,145Indexation rate for 20161.09%Gratuities and retroactive pay 

The threshold for determining the method to be used to calculate the source deduction of income tax from gratuities and retroactive pay has been increased from $14,300 to $14,450 for 2016.

Deduction for employment income 

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016.

Emergency services volunteer 

The tax-exempt financial compensation paid to an emergency services volunteer has been increased from $1,120 to $1,130 for 2016.

Maximum pensionable earnings and QPP contribution rate 

For 2016, the maximum pensionable earnings for the purpose of the QPP have been increased from $53,600 to $54,900 and the QPP contribution rate has been increased from 10.50% to 10.65%, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer. The maximum annual contribution to be withheld for any employee has therefore been increased from $2,630.25 to $2,737.05.

Note

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Maximum insurable earnings and QPIP premium rate 

For 2016, the maximum insurable earnings for the purpose of the QPIP have been increased from $70,000 to $71,500. The employee premium rate is 0.548% (instead of 0.559%) and the employer premium rate is 0.767% (instead of 0.782%). As a result, the maximum annual employee premium is $391.82 (instead of $391.30) and the maximum annual employer premium is $548.41 (instead of $547.40).

Maximum remuneration subject to the contribution to the financing of the Commission des normes du travail 

The portion of the remuneration in excess of $71,500 (instead of $70,000) is not subject to the contribution to the financing of the Commission des normes du travail (CNT) for 2016.

The rates, thresholds and amounts applicable to source deductions and contributions for 2016 are described below.

Indexation for 2016 

Every year, the personal income tax system is automatically indexed. The indexation rate for 2016 is 1.09%.

Income tax rates and income thresholds 

For 2016, the income tax rates applicable to the taxable income brackets remain unchanged and the income thresholds for these brackets have been indexed. Specifically:

• the 16% rate applies to taxable income of $42,390 or less (previously $41,935);
• the 20% rate applies to taxable income of more than $42,390, but not more than $84,780 (previously $83,865);
• the 24% rate applies to taxable income of more than $84,780, but not more than $103,150 (previously $102,040);
• the 25.75% rate applies to taxable income of more than $103,150.

Source Deductions Return (form TP-1015.3-V)

The Source Deductions Return (form TP-1015.3-V) has been revised for 2016 to take into account the indexation of the amounts appearing on it.

The indexed amounts used to determine deduction codes for 2016 are shown in the table below. The figures for 2015 are provided for information purposes.

Amounts to calculate source deductions20162015Basic amount$11,550$11,425Amount transferred from one spouse to the other$11,550$11,425Amount for other dependants who are 18 or older$3,100$3,065Amount for a child under 18 enrolled in post-secondary studies$2,130$2,105Additional amount for a person living alone (single-parent family)$1,675$1,655Amount for a severe and prolonged impairment in mental or physical functions$2,625$2,595Amount for a person living alone$1,355$1,340Age amount$2,485$2,460Amount for retirement income$2,210$2,185Reduction threshold used to calculate the net family income (This income is used to calculate the age amount, the amount for a person living alone and the amount for retirement income.) $33,505$33,145Indexation rate for 20161.09%Gratuities and retroactive pay 

The threshold for determining the method to be used to calculate the source deduction of income tax from gratuities and retroactive pay has been increased from $14,300 to $14,450 for 2016.

Deduction for employment income 

The maximum deduction for employment income has been increased from $1,120 to $1,130 for 2016.

Emergency services volunteer 

The tax-exempt financial compensation paid to an emergency services volunteer has been increased from $1,120 to $1,130 for 2016.

Maximum pensionable earnings and QPP contribution rate 

For 2016, the maximum pensionable earnings for the purpose of the QPP have been increased from $53,600 to $54,900 and the QPP contribution rate has been increased from 10.50% to 10.65%, which corresponds to a contribution rate of 5.325% for the employee and 5.325% for the employer. The maximum annual contribution to be withheld for any employee has therefore been increased from $2,630.25 to $2,737.05.

Note

Document TP-1015.TR.12-V, Source Deduction Tables for QPP Contributions: 12 Pay Periods, has been eliminated and its contents integrated into document TP-1015.TR-V, Source Deduction Tables for QPP Contributions.

Maximum insurable earnings and QPIP premium rate 

For 2016, the maximum insurable earnings for the purpose of the QPIP have been increased from $70,000 to $71,500. The employee premium rate is 0.548% (instead of 0.559%) and the employer premium rate is 0.767% (instead of 0.782%). As a result, the maximum annual employee premium is $391.82 (instead of $391.30) and the maximum annual employer premium is $548.41 (instead of $547.40).

Maximum remuneration subject to the contribution to the financing of the Commission des normes du travail 

The portion of the remuneration in excess of $71,500 (instead of $70,000) is not subject to the contribution to the financing of the Commission des normes du travail (CNT) for 2016.