CRA & Revenu Québec, Tax Basics

Alberta – Income Tax Brackets, Rates & Provincial Tax Credits

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 percent to 15 percent of income and the combined federal and provincial tax rate is between 25% and 48%.

Alberta’s Personal Income Tax Brackets for Tax Year 2021

Tax Rate

Tax Bracket

Taxable Annual Income

10%  on the first $131,220   $131,220 
12%  on the next $26,244  over $131,220 up to $157,464
13%  on the next $52,488  over $157,464 up to $209,952
14%  on the next $104,976  over $209,952 up to $314,928
15%  on the portion over $314,928  over $314,928

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 are not static; tax rates increase each year, based on inflation. 

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, such as employment, self-employment, pension, saving plans, investments, benefits, and more totaled on Line 15000 – Total Income, then subtracting applicable credits and 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 tax?

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 2021 tax year, the Alberta basic personal amount is  $19,369, while the federal basic personal amount is $13,808.

Moreover, the first tax bracket in Alberta (up to $131,220) is only taxed at a 10% tax rate. And with no sales tax, payroll tax, or health premium in Alberta, Albertans generally pay lower taxes and keep more of their earnings compared to other provinces.

Alberta 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 2021. 

Taxable income Employment, self-employment, interest, other income Capital Gains Eligible
Canadian dividends
Ineligible
Canadian dividends
First $49,020 25% 12.50% 2.57% 15.86%
Over $49,020 up to $98,040 30.50% 15.25% 10.16% 22.18%
Over $98,040 up to $131,220 36% 18% 17.75% 28.51%
Over $131,220 up to $151,978 38% 19% 20.51% 30.81%
Over $151,978 up to $157,464 41.32% 20.66% 25.09% 34.63%
Over $157,464 up to $209,952 42.32% 21.16% 26.47% 35.78%
Over $209,952 up to $216,511 43.32% 21.66% 27.85% 36.93%
Over $216,511 up to $314,928 47% 23.50% 32.93% 41.16%
Over $314,928 48% 24% 34.31% 42.31%

Alberta 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.

The most notable one is the 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 non-taxable 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.