HSF (health services fund)

The HSF, or Health Services Fund, is a contribution that every employer with a business in Quebec pays to Revenu Québec based on the wages they pay. Only the employer pays this contribution; nothing is withheld from the employee’s paycheck. The rate depends on the total payroll and the industry.

At a glance

Paid solely by the employer: nothing is deducted from the employee’s paycheck
Calculated based on payroll (the total amount of wages you pay) and submitted to Revenu Québec
Paid at the same time as source deductions (the amounts of tax and social security contributions withheld from each paycheck)
2026 Rates: from 1.25% (primary and manufacturing sectors) or 1.65% (services) for small payrolls, up to 4.26% for payrolls exceeding $7.8 million (Revenu Québec)
Reduced rate for small businesses in the primary (agriculture, mining, forestry) and manufacturing sectors; thresholds revised annually

Why it matters

When you hire your first employee, you think about the salary, but rarely about all the other costs on top of that. In addition to the HSF, there’s the QPP (Quebec Pension Plan, the public pension), the QPIP (Quebec Parental Insurance Plan, for maternity and paternity leave), Employment Insurance, and the CNESST (the agency that covers workplace accidents). A $50,000 salary can thus cost the employer several thousand dollars more. The HSF often comes as a surprise because it applies starting from the very first dollar of salary, including your own pay if you are a corporate officer (if you own a corporation) and an employee of your own company. In practical terms, a small or medium-sized service company with a payroll of $200,000 pays the HSF at a rate of 1.65%, or $3,300 per year; the minimum rate drops to 1.25% in the primary and manufacturing sectors and rises to 4.26% for payrolls exceeding $7.8 million, according to Revenu Québec’s 2026 rates. Before posting a job opening, calculate the total cost of hiring, not just the gross salary. Details on the rates can be found on the page HSF contribution from Revenu Québec. Also consider other payroll items such as the mileage allowance and the Employment Statement. To help you create this budget, Bankeo provides you with a vetted accountant or CPA for free, and we’re here to support you every step of the way.

Frequently asked questions

What exactly is the HSF, in simple terms?

The HSF, or Health Services Fund, is an amount that employers pay to the Government of Quebec (Revenu Québec) based on the wages they pay. It helps fund the public health care system. Unlike taxes or QPP contributions, nothing is deducted from the employee’s paycheck: it is an expense borne by the employer that is added to the employee’s salary.

Who has to pay into the HSF, and how much?

Any employer with a business in Quebec pays the HSF on the wages it pays, starting with the very first dollar. The rate varies depending on the size of your payroll (total wages) and your industry: in 2026, it ranges from 1.25% (small payrolls in the primary and manufacturing sectors) or 1.65% (services) up to 4.26% for payrolls exceeding $7.8 million. The thresholds change every year. Some individuals also pay a contribution to the HSF on their Revenu Québec tax return, based on income other than wages, such as certain investment or retirement income.

How much does an employee really cost in Quebec?

Much more than just the listed salary. In addition to the HSF, there’s the QPP (public pension), the QPIP (parental leave insurance), employment insurance, the CNESST (workplace accidents), and labour standards. Before hiring, calculate the total cost to protect your profit margins. Bankeo connects you for free with a vetted accountant/CPA who can help you build this hiring budget, and we’ll be there for you every step of the way.