Beautiful Alberta! Not only is Alberta one of the best places to live in Canada with stunning nature, the Calgary Stampede (dubbed the greatest outdoor show on earth), and tons of winter sports, but Alberta also boasts one of the lowest income tax rates in Canada.
The tax rates in Alberta range from 10% to 15% of income and the combined federal and provincial tax rate is between 25% and 48%.
- Alberta uses a progressive tax structure, which means that a specific tax rate is applicable to a set range of income.
- Alberta has the highest basic personal amounts (BPA) in Canada.
- For the 2023 tax year, the Alberta basic personal amount is $21,003, while the federal basic personal amount is $15,000.
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Alberta’s personal income tax brackets for Tax Year 2023
Tax Rate | Tax Bracket | Taxable Annual Income |
10% | on the first $142,292 | $142,292 or less |
12% | on the next $28,459 | over $142,292 up to $170,751 |
13% | on the next $56,917 | over $170,751 up to $227,668 |
14% | on the next $113,834 | over $227,668 up to $341,502 |
15% | on the portion over $341,502 | over $341,502 |
How Alberta’s tax brackets work
Alberta’s tax system is similar to most other Canadian provinces and largely mirrors the tax structure at the federal level. As with most provinces, Alberta uses a progressive tax structure, which means that a specific tax rate is applicable to a set range of income. Tax brackets aren’t static —tax rates increase each year, based on inflation.
What’s used to calculate the tax rates in Alberta?
Income for determining your tax bracket is calculated by adding the sum of all income streams for the year, such as employment, self-employment, pension, saving plans, investments, benefits, and more totalled on Line 15000 – Total Income, then subtracting applicable deductions. The result of this calculation is shown on Line 26000 – Taxable Income and used to determine your tax brackets.
You can use our free Alberta income tax calculator to get your tax amounts in minutes.
Why does Alberta pay less taxes?
Alberta has the highest basic personal amounts in Canada. Basic personal amounts are the allowable amount of income that you can earn before you must start paying taxes. For the 2023 tax year, the Alberta basic personal amount is $21,003, while the federal basic personal amount is $15,000
Moreover, the first tax bracket in Alberta (up to $142,292) is only taxed at a 10% tax rate. And with no sales tax, payroll tax, or health premiums in Alberta, Albertans generally pay lower taxes and keep more of their earnings compared to other provinces.
Alberta’s combined marginal tax rates
Along with provincial taxes, all Canadian taxpayers pay federal income taxes. Below are the combined Alberta and federal tax rates and brackets for 2023.
Taxable income | Employment, self-employment, interest and other income | Capital Gains | Eligible Canadian dividends | Ineligible Canadian dividends |
First $53,359 | 25% | 12.50% | 2.57% | 15.86% |
Over $53,359 up to $106,717 | 30.50% | 15.25% | 10.16% | 22.18% |
Over $106,617 up to $142,292 | 36% | 18% | 17.75% | 28.51% |
Over $142,292 up to $165,430 | 38% | 19% | 20.51% | 30.81% |
Over $165,430 up to $170,751 | 41.32% | 20.66% | 25.09% | 34.63% |
Over $170,751 up to $227,668 | 42.32% | 21.16% | 26.47% | 35.78% |
Over $227,668 up to $235,675 | 43.32% | 21.66% | 27.85% | 36.93% |
Over $235,675 up to $341,502 | 47% | 23.50% | 32.93% | 41.16% |
Over $341,502 | 48% | 24% | 34.31% | 42.31% |
Alberta’s provincial tax credits
Many of the Alberta provincial tax credits and deductions complement similar ones at the federal level, but there are some unique credits for residents of Alberta.
- Alberta child and family benefit (ACFB): In July 2020, the Alberta family employment tax credit (AFETC) and Alberta child benefit (ACB) were combined into one credit. This benefit is a nontaxable amount paid to lower-income families with children under 18 years of age. The quarterly amounts are issued separately from the Canada child benefit (CCB) in August, November, February, and May.
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