Quebec Payroll and QST Rules 2025 — How to Stay Compliant and Avoid Penalties

Quebec’s payroll and sales tax obligations are more complex than anywhere else in Canada. Businesses must comply with both federal and provincial systems, including CPP and QPP contributions, QST on taxable sales, and QPIP deductions. Non-compliance can trigger penalties from both CRA and Revenu Québec. Mackisen CPA Auditors Montreal helps businesses implement payroll and QST systems that are compliant, efficient, and audit-proof.

Legal and Regulatory Framework

Taxation Act (Quebec) Section 14: Defines employer obligations for payroll deductions.
Act Respecting the Québec Pension Plan (QPP): Requires employee and employer contributions separate from CPP.
Act Respecting Parental Insurance (QPIP): Mandates additional payroll contributions for Quebec employees.
Excise Tax Act (Canada): Governs GST, while Quebec’s Act Respecting the Québec Sales Tax (QST) sets its own 9.975% rate on taxable supplies.
Employment Standards Act (Quebec): Establishes employer reporting and remittance deadlines.
Revenu Québec’s Bulletin ADM.4-2: Sets rules for electronic payroll submissions and QST reporting.

Key Court Decisions

Lefebvre v. Quebec (2018): Confirmed Revenu Québec’s authority to reassess employers for missing QPP and QPIP remittances.
Beauchamp v. The Queen (2020): Reinforced that GST/HST and QST must be remitted independently, even when collected jointly.
Dufresne v. Quebec (2019): Clarified employer liability for inaccurate payroll filings under Quebec’s Taxation Act.

Why CRA and Revenu Québec Audit Payroll

CRA and Revenu Québec audit payroll for unreported wages, misclassified contractors, or missed remittances. Quebec employers often face dual assessments because of discrepancies between T4 and RL-1 slips. QST audits are triggered when sales exceed registration thresholds ($30,000 for small suppliers) or when deductions are incorrectly claimed on mixed supplies. Mackisen ensures every payroll and QST report is filed accurately and reconciled with both authorities.

Mackisen’s Strategy

1. Payroll Compliance Audit — Review all deductions for CPP, QPP, QPIP, and EI accuracy.

2. T4/RL-1 Reconciliation — Align both slips to prevent dual reassessments.

3. GST/QST Filing Integration — File both returns simultaneously with reconciled sales figures.

4. Employer Training — Implement systems for payroll software integration and real-time QST tracking.

5. Audit Defense — Respond to CRA and Revenu Québec requests with reconciled documentation.

Real Client Experience

A Montreal construction firm faced $85,000 in QPP and QST penalties for filing errors. Mackisen recalculated remittances, filed corrected RL-1s, and reduced penalties by 90 percent. A Quebec retailer overpaid QST due to reporting on exempt sales; Mackisen recovered $47,000 through amended filings.

Common Questions

What is the QST rate in 2025? 9.975% on most taxable sales in Quebec.
Do I need to collect both GST and QST? Yes, and file them separately.
How do I handle CPP vs QPP? Quebec employers contribute to QPP instead of CPP; rates differ.
Can Mackisen manage my payroll and sales tax? Yes, we provide full compliance management for CRA and Revenu Québec.

Why Mackisen

Mackisen CPA Auditors Montreal are specialists in Quebec payroll, QST, and employer compliance. Our CPAs manage CRA and Revenu Québec filings, ensuring accurate remittances, reduced penalties, and full legal compliance. Call Mackisen CPA Auditors Montreal today for your 2025 Payroll and QST Consultation. The first meeting is free and ensures your business is 100% compliant and protected.