Published | Category: Income tax - businesses
Reduced Contribution to the Health Services Fund for the Hiring of Specialized Workers
Unless the employer's total payroll for the year is $5 million or more, an eligible employer that has paid, allocated, granted or awarded salary or wages to one or more eligible employees in a given year prior to 2021 is deemed to have paid an excess contribution to the health services fund for the year equal to the rate of reduction applicable for the year multiplied by the lesser of
- the total eligible salary or wages paid in the year to eligible employees for the year; and
- the increase in the employer's total payroll for the year represented by the amount by which the employer's adjusted total payroll for the year exceeds the employer's adjusted total payroll for the employer's reference year.
Where an employer's total payroll for a year is $1 million or less, the rate of reduction applicable for the year is 2.7%; in all other cases, the rate is determined using the following formula:
An eligible employer for a year is any employer, other than an excluded employer, that, during the year, carries on a business in Québec and has an establishment there. The employer can be a legal person, a partnership or an individual.
An eligible employee is an employee who, under an employment contract, was hired for a recognized job in Québec requiring at least 26 hours of work per week for either an undetermined period or a minimum of 40 weeks, provided the employee has the degree or diploma ordinarily required for the recognized job and was hired
- after June 4, 2014, where the employer's reference year is the 2013 calendar year; or
- after the end of employer's reference year in all other cases.
Eligible salary or wages
An employee's eligible salary or wages for a given year correspond to the portion of the employee's salary or wages used to determine the employer contribution to the health services fund for the year, other than any amount that represents the value of a benefit the employee received by reason of an office or employment previously held by the employee.
An employer's reference year corresponds to the first post-2012 calendar year in which the employer carried on a business throughout the entire year.
The same rules used to determine an employer's contribution to the health services fund for a year are used to determine an eligible employer's total payroll for the year.
Increase in the total payroll
In determining the increase in an eligible employer's total payroll for a given year, the total payroll and the attributes of all employers associated with the eligible employer and each other at the end of the year, other than any employer for which the reference year has not ended by the start of the year, must be taken into account.
For more information, see pages 8 to 14 of the document entitled Additional Information on the Fiscal Measures of the Budget (PDF – 795 KB) tabled on June 4, 2014, by the Ministère des Finances.