Quebec Insurance Premium Tax Increase Effective January 1, 2027
If your organization has employees residing in Quebec who participate in your group benefits plan, we want to make you aware of an upcoming tax change that may affect benefit costs and payroll deductions.
What’s Changing?
Effective January 1, 2027, Quebec’s Insurance Premium Tax will increase from 9.0% to 9.975% on taxable insurance premiums. This increase applies to premiums paid for Quebec-resident employees after December 31, 2026.
What Does This Mean for Employers?
As a result of the tax increase:
- Group benefits premiums subject to Quebec’s Insurance Premium Tax will reflect the new rate beginning January 1, 2027.
- Employees who contribute toward the cost of their benefits may see a small increase in their payroll deductions.
- Employers should review payroll deduction calculations for Quebec-resident employees and implement any necessary adjustments effective January 1, 2027.
Recommended Next Steps
We encourage plan sponsors to review their current group benefits payroll deductions and funding arrangements in advance of the change to ensure a smooth transition in 2027.
If you have questions about how this update may impact your group benefits plan, please contact your CAPCORP. We’re here to help.
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