WHAT IS THE QST RATE AND HOW IS IT CALCULATED?

Businesses operating in Quebec must understand how QST (Quebec Sales Tax) works: its current rate, how it is applied, and how it interacts with the federal GST. Although most business owners know the general tax rates, many misunderstand how to calculate QST correctly, especially for invoicing, pricing strategies, POS setup, and interprovincial sales. This guide breaks down the QST rate, how it is calculated today, and the key rules every Quebec business must follow.

Understanding QST calculations ensures correct invoicing, accurate reporting, and full compliance with Revenu Québec.

LEGAL AND REGULATORY FRAMEWORK

QST is governed by the Quebec Taxation Act. Quebec administers both QST and GST for businesses operating in the province. Businesses that sell taxable goods or services in Quebec must:

• charge QST at the correct rate
• collect and remit QST to Revenu Québec
• display QST clearly on invoices
• calculate QST according to current rules

Historically, QST was calculated on a tax-on-tax basis (GST applied first, then QST on top). This is no longer the case.

KEY COURT DECISIONS

Courts have confirmed that:

• businesses must apply QST according to the law, regardless of POS software defaults
• incorrect application of QST results in assessments or denied credits
• sellers remain responsible for QST errors created by systems or staff
• invoices must show QST separately to be compliant
• Quebec’s method of calculating QST (post-harmonization) is legally valid

WHAT IS THE CURRENT QST RATE?

The QST rate is:

9.975% (effective since January 1, 2013)

This rate applies to nearly all taxable goods and services sold in Quebec unless an exemption applies.

IS QST STILL CHARGED ON TOP OF GST?

No.
Since 2013, QST is no longer calculated on GST. This is a common misconception — many older business owners still remember the old rules.

Today’s rules:

• GST is applied on the taxable amount
• QST is also applied on the same taxable amount
• They are calculated independently

Example: taxable supply of $100
• GST: $100 × 5% = $5
• QST: $100 × 9.975% = $9.975

HOW TO CALCULATE QST CORRECTLY

There are two approved ways to calculate QST:

METHOD 1 — Direct Calculation

Multiply the taxable amount by 9.975%.

Example:
Price: $100
QST = $100 × 9.975% = $9.98 (rounded)

METHOD 2 — Combined Effective Rate

If you want to calculate the total with both GST and QST:

• GST = 5%
• QST = 9.975%
• Combined = 14.975%

This combined number is useful for POS systems, cash registers, e-commerce platforms, or quick calculations.

Example:
Total tax = $100 × 14.975% = $14.98

IMPORTANT RULES ABOUT QST CALCULATION

1. QST is always shown separately on invoices

Invoices must display both GST and QST amounts separately to be compliant.

2. Rounding must follow standard rules

Amounts can be rounded to the nearest cent.

3. QST applies to most goods and services

Nearly all commercial transactions in Quebec are taxable unless specifically exempt or zero-rated.

4. Exemptions do not remove GST unless also exempt federally

GST and QST exemptions differ — businesses must classify correctly.

5. POS systems must be configured with new rates

Old systems may default to incorrect tax calculations if never updated.

6. Interprovincial sales follow place-of-supply rules

You charge QST only when the customer is in Quebec.

7. E-commerce platforms must apply correct QST settings

Shopify, Amazon, Etsy, WooCommerce require manual setup for Quebec tax.

COMMON MISTAKES IN QST CALCULATION

Many businesses continue to miscalculate QST because they:

• apply QST on top of GST (old rule)
• combine GST and QST incorrectly
• forget to update POS tax tables
• apply the wrong rate for discounts or promotions
• tax exempt supplies by mistake
• rely on software not configured for Quebec
• mix up GST/HST/QST rules when selling outside Quebec

These mistakes trigger refund delays or audit adjustments.

MACKISEN STRATEGY

Mackisen CPA ensures businesses use correct QST calculations across invoicing, POS systems, e-commerce platforms, accounting software, and tax filings. We:

• verify tax settings
• correct invoices
• configure systems for bilingual GST/QST compliance
• reconcile tax accounts
• prevent miscalculations that lead to assessments

Our team also trains staff and audits sales systems to make sure QST is charged and remitted correctly.

REAL CLIENT EXPERIENCE

A retailer unknowingly charged QST on top of GST. Mackisen corrected their POS system and filed adjustments.

An e-commerce seller miscalculated Quebec tax for months due to an incorrect platform setting. Mackisen fixed the coding and reduced penalties.

A contractor charged QST only on labor but not on materials. Mackisen recalculated the taxes and corrected returns.

COMMON QUESTIONS

Do I charge QST on shipping?
Yes — when the main supply is taxable.

Is QST the same as HST?
No. Quebec is not an HST province.

Can I combine GST and QST into one line on invoices?
No. They must be displayed separately.

Do discounts change the QST calculation?
Yes — QST must be calculated on the net price after discount.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures your business applies QST correctly on every invoice, online transaction, and tax filing. Our structured systems protect you from miscalculations and costly penalties.