With no provincial sales tax (PST), payroll tax, or health premiums, Alberta boasts some of the most competitive personal income tax rates in Canada. This article provides an authoritative overview of Alberta income tax brackets, rates, credits and deductions for the 2024 and 2025 tax years.
Alberta Tax Brackets & Tax Rates for 2024 and 2025
Alberta uses a progressive tax system with rates ranging from 8% to 15% applied to incremental ranges of taxable income. The federal tax bracket and Alberta tax brackets for the years 2025 and 2024 are as follows.
2025 Alberta Tax Brackets
| 2025 AB Tax Rate | 2025 AB Tax Bracket | 2025 Federal Tax Rate | 2025 Federal Tax Bracket |
|---|---|---|---|
| 8% | $60,000 or less | ||
| 10% | over $60,00 up to $151,234 | 15% | $57,375 or less |
| 12% | over $151,234 up to $181,481 | 20.5% | over $57,375 up to $114,750 |
| 13% | over $181,481 up to $241,974 | 26% | over $114,750 up to $177,882 |
| 14% | over $241,974 up to $362,961 | 29% | over $177,882 up to $253,414 |
| 15% | over $362,961 | 33% | over $253,414 |
Bill 32, passed in late 2024, caps annual indexing of Alberta’s tax brackets and credits at 2% – even when inflation exceeds this threshold. This 2% cap is lower than the actual 2.9% increase in Alberta’s Consumer Price Index (CPI). Over time, this slower bracket indexing will result in higher taxes for residents.
2024 Alberta Tax Brackets
| 2024 AB Tax Rate | 2024 AB Tax Bracket | 2024 Federal Tax Rate | 2024 Federal Tax Bracket |
|---|---|---|---|
| 10% | $148,269 or less | 15% | $55,867 or less |
| 12% | over $148,269 up to $177,922 | 20.5% | over $55,867 up to $111,733 |
| 13% | over $177,922 up to $237,230 | 26% | over $111,733 up to $173,205 |
| 14% | over $237,230 up to $355,845 | 29% | over $173,205 up to $246,752 |
| 15% | over $355,845 | 33% | over $246,752 |
Source: Government of Canada
2024-2025 Alberta Basic Personal Amount (BPA)
The basic personal amount (BPA) is the amount of income you can earn tax-free based on your province. Alberta has the highest BPA among the provinces:
- For 2025, the Alberta BPA is $22,323 (vs. $16,129 federally)
- For 2024, the Alberta BPA was $21,855 (vs. $15,705 federally)
If your total income falls under these thresholds, you pay no Alberta provincial tax. You can also claim BPAs for an eligible spouse and dependents.
How Do Combined Federal and Alberta Tax Rates Work?
Along with provincial taxes, Canadians pay federal income tax according to an overlapping set of tax brackets. Below are the combined federal and Alberta marginal tax rates and the BPA credit for employment income, capital gains, and dividends:
2025 Alberta Marginal Tax Rates
| Taxable Income | Tax Rates | Capital Gains Rates | Eligible Dividends | Non-Eligible Dividends |
|---|---|---|---|---|
| $0 to $16,129 | 0.00% | 0% | -31.93% | -12.89% |
| $16,130 to $22,323 | 15.00% | 7.5% | -11.23% | 4.36% |
| $22,324 to $57,375 | 25.00% | 11.25% | 2.57% | 15.86% |
| $57,376 to $114,750 | 30.50% | 15.25% | 10.16% | 22.18% |
| $114,751 to $151,234 | 36.00% | 18.00% | 17.75% | 28.51% |
| $151,235 to $177,882 | 38.00% | 19.00% | 20.51% | 30.81% |
| $177,883 to $181,481 | 41.32% | 20.66% | 25.08% | 34.62% |
| $181,482 to $241,974 | 42.32% | 21.16% | 26.46% | 35.77% |
| $241,975 to $253,414 | 43.32% | 21.66% | 27.84% | 36.92% |
| $253,415 to $362,961 | 47.00% | 23.50% | 32.93% | 41.16% |
| $362,962 and over | 48.00% | 24.00% | 34.31% | 42.31% |
Based on this, a taxpayer earning employment income of $130,000 would face a combined federal-provincial marginal rate of 36% (30.5% from Alberta plus 5.5% from the federal level).
2024 Alberta Marginal Tax Rates
| Taxable Income | Tax Rates | Capital Gains Rates | Eligible Dividends | Non-eligible Dividends |
|---|---|---|---|---|
| $0 to $15,705 | 0.00% | 0.00% | -31.93% | -12.89% |
| $15,706 to $21,885 | 15.00% | 7.50% | -11.23% | 4.36% |
| $21,886 to $55,867 | 25.00% | 12.50% | 2.59% | 15.86% |
| $55,868 to $111,733 | 30.50% | 15.25% | 10.16% | 22.18% |
| $111,734 to $148,269 | 36.00% | 18.00% | 17.75% | 28.51% |
| $148,270 to $173,205 | 38.00% | 19.00% | 20.51% | 30.81% |
| $173,206 to $177,922 | 41.32% | 20.66% | 25.08% | 34.62% |
| $177,923 to $237,230 | 42.32% | 21.16% | 26.46% | 35.77% |
| $237,231 to $246,752 | 43.32% | 21.66% | 27.84% | 36.92% |
| $246,753 to $355,845 | 47.00% | 23.50% / 31.33% | 32.93% | 41.16% |
| $355,846 and over | 48.00% | 24.00% / 32.00% | 34.31% | 42.31% |
Capital Gains Tax in Alberta
When you sell investments like stocks or real estate at a profit, 50% of the realized capital gain is taxable. This taxable amount is added to your income and taxed at your marginal rate. Refer to the marginal tax tables for the Alberta 2024 and 2025 capital gains rates, and explore our guide for more insights on capital gains tax in Canada.
Step-by-Step to Calculate Your Alberta Income Tax
Follow these steps to calculate your Alberta income tax:
- Add up all taxable income reported on your T1 General form (Line 15000)
- Subtract any eligible deductions to determine taxable income (Line 26000)
- Look up your applicable 2024 or 2025 Alberta tax bracket based on your taxable income
- Multiply your taxable income by the marginal rate for that bracket
- The result equals total Alberta tax owing (less any tax credits)
For example, based on the 2025 brackets, a single taxpayer with taxable income of $90,000 would calculate their Alberta tax as: ($60,000 x 0.08) + ($30,000 x 0.10) = $4,800 + $3,000 = $7,800
What Are the Key Tax Credits and Benefits in Alberta?
Now, let’s look into the unique tax credits and deductions available for residents in Alberta
Alberta Child and Family Benefit
This nontaxable benefit provides quarterly payments to lower-income Alberta families based on:
| Number of Children | July 2023 – June 2024 | July 2024 – June 2025 |
|---|---|---|
| 1 child | $1,410 | $1,469 |
| 2 children | $2,115 | $2,204 |
| 3 children | $2,820 | $2,939 |
| 4 children | $3,525 | $3,674 |
There is also a Working Component ranging from $722 up to $1,982 per child when families earn at least $2,760 in employment income. The full ACFB is available for families earning below $27,564. Payments scale back at higher incomes.
Other Provincial Credits
Other tax credits and benefits include:
- Alberta Seniors Benefit: Provides monthly payments to eligible low-income seniors.
- Climate Action Incentive Payment (CAIP): Helps offset increased fuel costs from the federal carbon tax. Payment sizes are based on family size.
Why Does Alberta Have Lower Taxes Than Other Provinces?
There are several reasons why Albertans enjoy lower overall taxes:
- No provincial sales tax (PST): Unlike BC, SK, MB and ON, which levy additional sales taxes.
- No payroll tax: Makes Alberta more attractive for business investment.
- No health premiums: Most provinces charge premiums to fund healthcare.
- Higher basic personal amount: $22,323 in Alberta vs. an average of $11,814 in other provinces.
- Historical factors: Following Ralph Klein’s introduction of a flat 10% tax rate in 1999, subsequent governments maintained Alberta’s tax advantage. The current system uses progressive tax rates that rise at higher income levels.
Calculate income tax in other provinces in Canada:
How Much Tax Is Deducted from Your Alberta Paycheque?
Your employer deducts income tax from each paycheque based on federal and Alberta tax rates, as well as CPP and EI contributions:
- Federal tax: Ranges from 15% to 33% of taxable income
- Alberta income tax: 10% to 15%
- CPP contributions: 5.70% of pensionable earnings (matched by employer)
- EI premiums: 1.58% of insurable earnings (multiplied by 1.4)
Add them up to determine your total payroll tax and deduction amount.
Frequently Asked Questions
Below are answers to some common questions about Alberta income tax:
Can self-employed individuals opt out of EI in Alberta?
Yes, self-employed Canadians and incorporated business owners can apply to exclude themselves from Employment Insurance (EI) premiums. As a result, they cannot collect EI special benefits. To maintain EI eligibility, self-employed taxpayers must continue making contributions.
When do the new 2025 Alberta tax brackets take effect?
The 2025 Alberta personal income tax brackets take effect starting January 1, 2025 and apply to the full 2025 tax year.
How does the new 8% tax bracket benefit lower-income earners?
Introduced in 2025, the new provincial tax rate of 8% on income below $60,000 reduces the tax burden for low and middle-income residents. For example, an individual earning $45,000 now pays $3,600 in Alberta tax vs. $4,500 under the previous 10% bracket.
With no sales tax and competitive income tax brackets, Alberta remains one of the best provinces for middle and high-income earners looking to retain more of their hard-earned money. Use this resource as a reference when budgeting and financial planning. Reach out to one of our team members to see if you qualify for additional Alberta tax savings as an owner or investor in residential real estate.
