CRA & Revenu Québec

Alberta Income Tax Rates and Tax Brackets

Beautiful Alberta! They probably weren’t thinking about taxes when they chose the motto “strong and free”. Alberta isn’t tax-free, but if you’re up to date on the latest tax rates and most popular credits, deductions and programs, you might feel less of a tax burden come tax time.

Alberta has a tax system similar to other Canadian provinces. Many of the Alberta provincial taxes and credits compliment similar credits at the federal level, but there are some unique credits for residents of Alberta.

Alberta’s Progressive Tax Rate Structure

As with most provinces, Alberta uses a progressive tax structure.

The tax brackets increase each year, based on inflation. Visit the Alberta Treasury Board and Finance Personal Income Tax page for this year’s tax bracket rates.

Alberta’s Income Tax Brackets for Tax Year 2019

  • 10% on the first portion that is $131,220 or less
  • 12% on the portion from $131.220.01 up to $157,464, plus
  • 13% on the portion from $157,464.01 up to $209,952 plus
  • 14% on the portion from $209,952.01 up to $314,928, plus
  • 15% on the portion that is $314,928.01 and up

Alberta Tax Credits

  • Alberta Family Employment Tax Credit (AFETC): This credit helps lower, and middle-income working families provide for their children and encourage parents to stay in the workforce. Learn more.
  • Alberta Child Benefit (ACB): The ABC assists lower-income families with children under 18. Learn more.

What is a Tax Bracket?

A tax bracket is the tax rate applicable to a set range of income.

Alberta’s tax system is similar to most other Canadian provinces and largely mirrors the tax structure at the federal level. Alberta also has some province-specific credits. First, let’s take a closer look at how taxes and tax brackets in Alberta work.

Do You Have to File Income Tax?

Yes. By law, you must file an income tax return. Some dangerous myths are floating around that certain groups of people are exempt, but this is not the case. The Government of Canada’s website tackles these myths head-on. Failing to file will result in interest and penalties.  

How is the Tax Rates Structure in Alberta Determined?

For the past 5 years, the Government of Alberta has used a progressive structure to calculate tax brackets in Alberta. The tax rates in Alberta range from 10 percent to 15 percent of income. Therefore, your income tax rates are determined by how much income you made during the year. Tax brackets in Alberta are not static; they can change from year to year.

What Is 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 (employment, self-employment, pension, saving plans, investments, benefits, and more) and subtracting applicable credits and deductions. Your income may include dividends, which are shares you receive as an investor from a corporation. When it comes to your tax return, there is a difference between eligible and ineligible dividends; the rate for dividends depends on their classification.

There is an allowable amount of income that you can earn before you must start paying taxes. That is called the “basic personal” or “personal amount.” For 2019 fiscal year, the Federal basic personal amount is $12,069, while the Alberta basic personal amount is $19,369. Alberta has the highest basic personal amount in Canada.

To further reduce your tax burden, the Alberta government offers a number of additional credits, such as the AFETC & ACB mentioned above.

Paying Income Taxes Owed to the Canada Revenue Agency (CRA)

It is important to file your tax return and pay your tax bill on time. Most banks can handle this transaction for you. You can also pay directly to CRA by using its My Payment platform. Payments can also be made by cheque. The CRA will collect both federal taxes owed and provincial taxes owed in most provinces, including Alberta.

Avoiding Interest and Penalties

You are charged interest and penalties if you fail to either file your tax return or pay it on time. The interest and penalties add up quickly, leaving you with a hefty bill. If you are having trouble paying your taxes, contact CRA to discuss a payment arrangement.

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References & Resources:

Provincial tax brackets