Quebec Retail Sales Tax (RST) on group insurance premiums and Administrative Services Only (ASO) will increase on January 1, 2027

October 08, 2026

Effective January 1, 2027, the Quebec tax on insurance premiums will increase from 9% to 9.975%, as announced in the province’s budget on March 25, 2025.  For plan members who reside in Quebec and plan sponsors with a location and/or plan members in Quebec, the increased rate will apply to certain amounts paid under ASO arrangements and taxable group insurance premiums for coverages including, but not limited to:

  • Life insurance
  • Extended Health Care (EHC)
  • Dental coverage
  • Accidental death and dismemberment
  • Disability (short-term and long-term)
  • Critical illness
  • Stop loss insurance
  • ASO claims and, where applicable, fees

Plan sponsors who receive billing statements/invoices from Sun Life

Billing statements/invoices sent to you from Sun Life will include the applicable Quebec tax on insurance premiums – based on the premium due date:

  • Premium due date on or before December 31, 2026 – 9%
  • Premium due date on or after January 1, 2027 – 9.975%

Plan sponsors who prepare billing statements for premium payments sent to Sun Life

Please calculate the applicable Quebec tax on insurance premiums based on your premium or ASO billing due date – as follows:

  • On or before December 31, 2026 – 9%
  • On or after January 1, 2027 – 9.975%

You also need to clearly show the Quebec tax on insurance premiums separately from the premium and any other applicable taxes on your billing statement.

Payroll files

Payroll-related information sent to you from Sun Life will reflect the increased tax rate, starting January 1, 2027.

Disclaimer

If applicable, our statement/invoice may state two taxes with rates of 9.975%. One tax rate is the Quebec tax on insurance premiums mentioned above, and the second is the Quebec sales tax rate of 9.975%. The sales tax rate is charged with the goods and services tax (5%), totaling 14.975%.

We recommend consulting your tax professional to review the initial invoice.

To learn more about the budget, visit the Government of Quebec website.

Questions? We’re here to help.

Please contact your Sun Life Group Benefits representative.