GST and QST for service businesses: the headache-free guide

If you bill services in Quebec, you collect two taxes: the federal GST at 5% and the provincial QST at 9.975%. Simple on the surface — but mistakes are common and expensive in an audit.

The fundamental rule: two independent calculations

Since 2013, QST is calculated on the pre-tax price, not on price-plus-GST. The two taxes add up; they don't compound.

Example on a $450.00 service call:

• GST: $450.00 × 5% = $22.50
• QST: $450.00 × 9.975% = $44.89
• Total: $517.39

An old Excel template that still compounds QST on the GST-included amount overbills your clients by about 0.5% — enough to trigger disputes and chains of credit notes.

The common traps

• Rounding. Each tax rounds to the cent, half-cent up. On multi-line invoices, rounding at the wrong level (line vs total) creates one-cent gaps that snag payments and accounting reconciliations.
• Exempt clients. Some organizations don't pay the taxes — you need the certificate on file, not a verbal note.
• Supplies outside Quebec. A contract for an Ontario client follows different rules (13% HST). Place of supply determines the tax.
• Filing periods. Depending on revenue, you file monthly, quarterly or annually. Missed deadlines generate automatic penalties and interest.

What good software must do for you

Calculate both taxes independently at the correct rate for the date, handle per-client exemptions with the certificate on file, produce the GST/QST remittance summary per period, and remind you of deadlines. MainteQC does all four — rates are historized, so a 2024 invoice reprinted in 2026 shows 2024 rates. Plan details on the pricing page.

Plain-language summary, not tax advice: your accountant remains the authority for your filings.