Personal income tax overview and tax credits / rebates

Alberta's tax system supports low- and middle-income households while promoting opportunity and investment.

Alberta has the highest basic personal and spousal amounts in Canada, meaning that Albertans are able to earn more before they have to start paying provincial income tax (see Alberta's Non-Refundable Tax Credit Block). When all taxes are taken into consideration, Albertans across all income ranges generally pay lower overall taxes compared to other provinces. For more information, see Alberta's Tax Advantage.


Changes to Alberta's personal income tax system
(as of October 1, 2015) and revenue raised

In 2015, the government implemented a progressive personal income tax rate structure to help reduce our reliance on volatile non-renewable resource revenue and provide additional revenue to fund the public services and infrastructure that benefit Albertans. The increase in personal income tax revenue is estimated at $875 million in 2017-18, as reported in Budget 2017.

The following table shows an estimate of how much of the additional revenue comes from each income tax bracket, along with an estimate of the number of taxfilers whose top tax rate falls within the bracket.

Tax Bracket
(2017)

Tax Rate
(2017)

Additional  Personal Income Tax
Revenue from Tax Change (2017-18)

Number
of Taxfilers

Proportion
of Taxfilers

Up to $126,626

10%

N/A

2,857,284

92.1%

$126,625.01 to $151,950

12%

$13 million

81,145

2.6%

$151,950.01 to $202,600

13%

$61 million

75,162

2.4%

$202,600.01 to $303,900

14%

$120 million

50,462

1.6%

$303,900.01 and up

15%

$681 million

38,518

1.2%

Total:
N/A
$875 million
3,102,571
N/A

Source: Alberta Treasury Board and Finance.

Notes:

  • Based on Budget 2017 estimates. 
  • Estimates are based on the most recent historical data available at the time. Revenues are adjusted to 2017-18 and incorporate estimates of how tax increases impact taxable income.

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Tax Credits and rebates

The Government of Alberta provides two generous refundable tax credit programs for families with children, the Alberta Child Benefit (ACB) and the Alberta Family Employment Tax Credit (AFETC). Together, these programs are estimated to provide about $320 million to Alberta families in 2017‑18.

The Alberta Climate Leadership Adjustment Rebate is also available to help lower- and middle-income households with the costs of the carbon levy. The rebate is part of the Climate Leadership Plan and will provide $1.5 billion over three years. It is estimated that 60% of households will receive the full value of the rebate. Additional households will receive a partial rebate.

To support Alberta businesses, government recently introduced two new tax credits aimed at supporting jobs and economic diversification:

  • the Alberta Investor Tax Credit (AITC) offers a 30% tax credit to investors who make equity investments in eligible Alberta businesses that undertake research, development, or commercialization of new technology, new products, or new processes; and

  • the Capital Investment Tax Credit (CITC) is a two‑year program that provides a 10% non‑refundable tax credit of up to $5 million for a corporation’s eligible capital expenditures on manufacturing, processing and tourism infrastructure.

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Income tax credit indexing

Alberta’s personal income tax system is indexed to inflation to ensure that the value of tax credits is not eroded over time, and that taxpayers are not pushed into higher tax brackets. In 2017, the credit amounts increased by 1.3 per cent.

Other personal tax credits that increased by 1.3 per cent to offset inflation include the Alberta Child Benefit and the Alberta Family Employment Tax Credit.

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Personal income tax calculator

Estimate your personal income tax for:

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Commonly used forms

Alberta's personal income tax system is administered by the Canada Revenue Agency (CRA).  Click on the links below for commonly used forms available from the CRA:

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Page last updated:  January 18, 2018