The personal income tax system is indexed at 6.44% for 2023.

Amounts indexed at that rate include:

• income thresholds;
• personal tax credit amounts;
• deduction code amounts;
• the threshold for determining the method to be used to calculate the source deduction of income tax on a gratuity or retroactive pay;
• the maximum deduction for employment income;
• the maximum exemption that can be granted to an emergency services volunteer.

The taxable income thresholds and the constants for adjusting the income tax rates have been indexed for the 2023 taxation year. Also as of 2023, the income tax rates for the first two taxable income brackets drop from:

• 15% to 14% for taxable income up to $49,275;
• 20% to 19% for taxable income over $49,275 but not more than $98,540.

As a result, the constants for adjusting the rates that apply to the last two taxable income brackets have increased. The rates are unchanged at 24% and 25.75%.

The table below shows the income tax rates, income thresholds and constants for 2023.

The personal tax credit amounts on the Source Deductions Return (TP‑1015.3-V) are indexed for 2023.

Decrease in the conversion rate

As of 2023, the conversion rate for the amounts used to calculate personal tax credits is decreased from 15% to 14%.

Increase in the amounts used to calculate some personal tax credits 

As of 2023, the amounts shown in form TP-1015.3-V that are used to calculate some personal tax credits increase.The amount for other dependants increases from $4,810 to $5,154, and the amount for a child under 18 enrolled in vocational training or post-secondary studies (per term) increases from $3,301 to $3,537. Source deductions of income tax on remuneration paid after June 30, 2023, must take these changes into account.
 

The table below shows the personal tax credit amounts for 2023.

For 2023, the threshold for determining the method to be used to calculate the source deduction of income tax on gratuities and retroactive pay is $17,183.

The rate for source deductions of income tax on gratuities and retroactive pay decreases from 8% to 7%.

For 2023, the maximum deduction for employment income is $1,315. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V) takes the amount into account.

Starting January 1, 2023, employers have to include the amount that represents an employee's additional contributions to the Québec Pension Plan (QPP) when they determine the remuneration that is subject to Québec income tax.

The Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V), the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) and WebRAS for 2023 have been modified to include the amount.

For 2023, the maximum exemption that can be granted to an emergency services volunteer is $1,315.

For 2023, you must withhold income tax at a rate of 14% from the taxable portion of a disability assistance payment from a registered disability savings plan (RDSP) that exceeds $20,998.

The table below provides the Québec Pension Plan (QPP) data for 2023.

The table below provides the Québec parental insurance plan (QPIP) data for 2023.

The table below shows the health services fund contribution rates for 2023, by total payroll. For this year, the total payroll threshold for eligibility for a reduction of the health services fund contribution rate is increasing from $7 million to $7.2 million.

1. The result must be rounded off to two decimal places. If the number in the third decimal place is 5 or more, round up the number in the second decimal place.

Since the tax rates for the first two taxable income brackets for individuals are reduced, the fixed rates used to calculate source deductions of income tax on some payments and remuneration change as well. This includes the payments and remuneration listed below that are made after June 30, 2023.

Single payment under a RRIF or an RRSP

The rate for the part of a single payment under a registered retirement income fund (RRIF) that exceeds the minimum amount or for a single payment under a registered retirement savings plan (RRSP) decreases from 15% to 14%.

Other single payments

The rate for a single payment not exceeding $5,000 that does not come from a RRIF or an RRSP decreases from 15% to 14%. If the payment exceeds $5,000, the rate drops from 20% to 19%.

The single payments covered by the rate reduction are as follows:

• retiring allowance payments;
• certain payments from a registered education savings plan (RESP);
• certain payments from a pension plan;
• a payment made under a deferred profit-sharing plan (DPSP);
• a death benefit payment;
• an amount paid to an employee or a former employee pursuant to an order or judgment, where part of the amount paid relates to a previous year.

Payment under a government work-incentive project

The rate for an earnings supplement payment under some government work-incentive projects decreases from 15% to 14%.

Remuneration of self-employed fishers

The rate applied to the remuneration of individuals who fish otherwise than under an employment contract and who elected to have income tax deducted at source from their remuneration decreases from 15% to 14%.

Payment under a program to obtain information relating to tax non-compliance

The rate for a payment under a federal or provincial program to obtain information relating to tax non-compliance decreases from 20% to 19%.

Special tax on accumulated investment income from an RESP

The special tax deduction rate of 8% in Québec on the accumulated investment income from an RESP is maintained so that the combined (federal and Québec) tax rate of 20% continues to apply to Québec residents.