Quebec QST + GST Calculator for Small Businesses: 14.975% Rate, Invoice Examples, and ITR Rules

How Quebec's Dual-Track Sales Tax Works

Every other Canadian province either uses a harmonized sales tax (HST) that combines federal and provincial tax into a single remittance, or charges GST plus a provincial sales tax (PST) where the PST is calculated on the same base as GST. Quebec follows the second model — GST plus a provincial tax called the QST (Québec Sales Tax) — but with an important administrative wrinkle: you register, collect, and remit these taxes to two completely separate agencies.

The GST portion (5%) goes to the Canada Revenue Agency. The QST portion (9.975%) goes to Revenu Québec. You need separate registration numbers for each, and you file separate returns. This is unique to Quebec — no other province requires this level of dual administration.

The Critical Rule: QST Is Calculated on the Pre-GST Subtotal

Before 2013, QST was indeed calculated on the GST-inclusive amount (at a lower rate of 9.5% to produce an equivalent tax burden). Revenu Québec changed the calculation method in January 2013, raising the rate to 9.975% and switching to a parallel calculation on the pre-tax subtotal. Any accounting software or invoice template set up before 2013 — or any guide referencing the old compound method — will produce incorrect invoices. This is a surprisingly persistent error because many online resources still describe the pre-2013 compound method.

Invoice Example 1: $1,000 Sale

A Quebec-based web design freelancer invoices a Montreal client $1,000 for a website redesign. Here is the correct invoice breakdown:

The client pays $1,149.75. The freelancer keeps $1,000.00 in revenue, holds $50.00 for GST remittance to the CRA, and holds $99.75 for QST remittance to Revenu Québec. Both tax amounts must appear as separate line items on the invoice — you cannot combine them into a single "sales tax" line.

Invoice Example 2: $5,000 Sale

A small IT consulting firm in Quebec City bills a provincial government contractor $5,000 for a security audit. The invoice math scales linearly:

At $5,000, the total tax collected is $748.75. If this firm also purchased $2,000 in taxable business supplies during the same quarter, they would claim $100 in ITCs (GST) and $199.50 in ITRs (QST), remitting only $150 in GST and $299.25 in QST — a net remittance of $449.25. This is where tracking ITCs and ITRs separately becomes critical for cash flow.

Invoice Example 3: $25,000 Sale

A Quebec marketing agency delivers a quarterly retainer project worth $25,000 to a Toronto-based client. Because the client is in Ontario and the service is performed in Quebec, both GST and QST apply (the place of supply rules for services generally follow the supplier's location for B2B services within Canada):

At this invoice size, the tax component alone — $3,743.75 — exceeds the monthly revenue of many solo businesses. This illustrates why proper tax hold-back accounts are essential. Setting aside 14.975% of every payment received into a separate bank account prevents the common cash flow trap of spending collected tax before the remittance deadline.

The $30,000 QST Registration Threshold

You are a "small supplier" and exempt from mandatory QST registration if your total taxable revenues (worldwide) are $30,000 or less over any rolling four consecutive calendar quarters. The same threshold applies to GST registration with the CRA. Once you exceed $30,000, you must:

• Register for GST with the CRA within 29 days
• Register for QST with Revenu Québec within 30 days
• Begin charging both taxes immediately on all taxable supplies
• File returns on the schedule assigned by each agency (typically quarterly for new registrants)

Strategic consideration: Many small businesses voluntarily register before hitting the threshold. Why? Because registration lets you claim ITCs and ITRs on your business purchases. If you spend $20,000 on taxable supplies before reaching $30,000 in revenue, you cannot recover the $2,995 in sales tax paid on those purchases unless you are registered. For capital-intensive startups, early registration often produces a net refund in the first few quarters.

For context on Quebec-specific tax planning for business owners, see our Quebec Lifetime Capital Gains Exemption Calculator which covers the $1.25M LCGE on qualified small business shares.

ITR vs. ITC: Quebec's Unique Dual-Refund System

In HST provinces, you claim a single input tax credit (ITC) that recovers both the federal and provincial portions of tax paid on business expenses. Quebec's separate system means you claim two different refunds:

The critical difference is the large business ITR restriction. Businesses with annual taxable supplies exceeding $10 million cannot claim ITRs on certain categories of expenses:

• Meals and entertainment (QST on restaurant bills, catering)
• Telecommunications services (phone, internet)
• Fuel and energy (electricity, natural gas, gasoline)
• Road vehicles weighing under 3,000 kg

Small businesses under the $10 million threshold can claim full ITRs on all of these categories — a meaningful advantage. On $50,000 in annual meals, telecom, and fuel expenses, the ITR restriction costs a large business $4,988 per year in unrecoverable QST. This restriction does not apply to ITCs — the GST portion is always fully recoverable regardless of business size.

Quarterly Remittance Deadlines and Filing Frequency

Your filing frequency depends on your annual taxable revenue:

Most small businesses fall into the annual filing category, which simplifies administration but creates a cash management challenge: you collect tax all year but only remit once. A business invoicing $200,000 annually collects $29,950 in combined GST/QST over 12 months. That money must be available on the June 15 deadline — not spent on operations. Setting up a dedicated tax hold-back account from day one is the single best practice for avoiding remittance shortfalls.

For businesses also dealing with income tax planning, our Ontario Income Tax Take-Home Analysis provides a useful comparison point for business owners evaluating interprovincial incorporation strategies.

Quick-Reference: GST + QST on Common Invoice Amounts

For day-to-day invoicing, this reference table covers common billing amounts:

What Your Invoice Must Include

Revenu Québec requires specific information on every invoice where QST is charged. Missing any of these elements can cause your client's ITR claim to be denied:

• Your business name and address
• Your GST registration number (9-digit format + RT0001)
• Your QST registration number (10-digit format + TQ0001)
• Invoice date and a unique invoice number
• Description of goods or services supplied
• Subtotal amount before tax
• GST amount shown separately
• QST amount shown separately
• Total invoice amount

For invoices under $150, a simplified format is acceptable — you can omit the buyer's name and show the total with a statement that GST and QST are included. Above $150, the full format is mandatory. Getting your invoice format right from the start prevents ITR claim rejections for your clients and audit issues for you.

If you are also managing estate or trust distributions in Quebec, our Quebec Minor Child Beneficiary Calculator covers the provincial trust tax rules that affect business succession planning.

Quebec vs. Other Provinces: Rate Comparison

Quebec's 14.975% combined rate sits at the top of the Canadian sales tax spectrum. Here is how it compares:

The administrative cost of Quebec's dual-filing system is a hidden burden. Atlantic provinces technically have a higher combined rate (15%), but their single HST return takes a fraction of the time. Quebec businesses spend an estimated 30–50% more on sales tax compliance than businesses in HST provinces at the same revenue level — a real cost that does not show up in the rate comparison alone.

For a deeper look at how provincial tax differences affect overall tax burden, see our Alberta vs Ontario Income Tax Comparison and the BC Property Transfer Tax Calculator for examples of provincial tax divergence across Canada.

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