Alberta Tax Guide 2025
Everything you need to know about Alberta's tax system, including the new 8% bracket introduced in 2025.
2025 Alberta Tax Highlights
NEW 8% Tax Bracket
First $60,000 now taxed at just 8%
No Provincial Sales Tax
Only 5% GST vs 13% HST in Ontario
Lowest in Canada
Lowest combined tax burden for most incomes
No Health Premium
Unlike Ontario and BC
Alberta Tax Brackets 2025
Alberta introduced a new 8% tax bracket in 2025, reducing taxes for everyone earning under $60,000. This is the first significant change to Alberta's tax structure in years and makes Alberta even more competitive.
| Taxable Income | 2025 Rate | 2024 Rate |
|---|---|---|
| $0 to $60,000 | 8% (NEW!) | 10% |
| $60,000 to $151,234 | 10% | 10% |
| $151,234 to $181,481 | 12% | 12% |
| $181,481 to $241,974 | 13% | 13% |
| $241,974 to $362,961 | 14% | 14% |
| Over $362,961 | 15% | 15% |
2025 Tax Savings
The new 8% bracket saves Albertans up to $1,200 per year compared to 2024. If you earn $60,000 or more, you'll save 2% on your first $60,000 of income = $1,200.
No Provincial Sales Tax (PST)
Alberta is one of only three provinces with no provincial sales tax. Albertans only pay the 5% federal GST on purchases, compared to:
- Ontario: 13% HST (8% more)
- BC: 12% combined (7% more)
- Quebec: 14.975% combined (9.975% more)
Real Savings Examples
| Purchase | Alberta Tax | Ontario Tax | You Save |
|---|---|---|---|
| $40,000 Vehicle | $2,000 | $5,200 | $3,200 |
| $2,000 Laptop | $100 | $260 | $160 |
| $50,000 Annual Spending | $2,500 | $6,500 | $4,000/year |
Alberta Tax Credits & Benefits
Alberta Child and Family Benefit (ACFB)
The ACFB is Alberta's provincial benefit for families with children under 18. It's paid quarterly along with the federal Canada Child Benefit.
2025 ACFB Maximum Amounts
- Base benefit per child: Up to $1,469
- Working component (1 child): Up to $734
- Working component (2+ children): Up to $1,100
Benefits phase out based on family net income. Lower income families receive the full amount.
Climate Action Incentive Payment
Alberta residents receive the federal Climate Action Incentive Payment to offset carbon pricing costs. For 2025, Alberta families can receive:
- Single adult: Approximately $450/year
- Couple: Approximately $675/year
- Per child: Additional ~$113
- Rural supplement: Extra 20% for rural Albertans
Alberta Basic Personal Amount
Alberta has one of the highest provincial basic personal amounts in Canada at $22,323 for 2025. This means your first $22,323 of income is not subject to provincial tax.
No Health Premium
Unlike Ontario (which has an employer health tax) and BC (which had MSP premiums until 2020), Alberta has no health premium or payroll health tax. Healthcare is funded entirely through general tax revenue.
Property & Land Transfer
Alberta has no land transfer tax like Ontario or BC. When buying property, you only pay:
- Property registration fee: ~0.02% of property value
- Mortgage registration fee: ~0.01% of mortgage
- Title insurance (optional but recommended)
| $600,000 Home Purchase | Transfer Tax/Fees |
|---|---|
| Alberta | ~$240 |
| Ontario | $10,475 |
| BC | $12,000 |
Business Tax Advantages
Alberta offers significant advantages for business owners:
Corporate Tax Rates 2025
- Small business rate: 2% (lowest in Canada)
- General corporate rate: 8% (lowest in Canada)
- Combined with federal: 11% small business, 23% general
Business Operating Advantages
- No PST on equipment, supplies, or services
- Lower workers' compensation rates than many provinces
- Business-friendly regulatory environment
- Energy sector incentives
Provincial Comparison
How does Alberta compare to other major provinces for total tax burden?
| Province | $75K Income Tax | $150K Income Tax | PST |
|---|---|---|---|
| Alberta | ~$16,500 | ~$42,000 | 0% |
| Ontario | ~$17,800 | ~$47,500 | 8% |
| BC | ~$17,200 | ~$48,000 | 7% |
| Quebec | ~$20,500 | ~$54,000 | 9.975% |
Moving to Alberta
If you're considering a move to Alberta for tax savings, here's what to know:
- December 31 rule: Your province of residence on December 31 determines which province you file taxes in
- Immediate savings: Start saving on PST immediately upon moving
- Vehicle registration: Lower vehicle registration costs
- Home purchase: Save $10,000+ on land transfer tax vs Ontario
Planning Tip: If you're moving to Alberta, timing your move before December 31 means you'll file your entire year's taxes at Alberta rates. Timing after January 1 means waiting another year.
Tax Planning for Albertans
RRSP Contributions
RRSP contributions are deductible at your marginal rate. With Alberta's new 8% bracket, those in lower brackets may want to prioritize TFSA instead (since RRSP deductions at 8% are less valuable).
Income Splitting
With Alberta's flat 10% rate for most income, income splitting provides less provincial benefit than in high-tax provinces. However, federal tax savings still apply.
Capital Gains
Capital gains are taxed at 50% inclusion. Combined federal + Alberta rates range from ~12% to ~24% effective tax on capital gains depending on your income bracket.
Questions About Alberta Taxes?
Our AI tax assistant can help answer your specific questions about Alberta provincial taxes, credits, and planning strategies.
Ask the Tax AssistantDisclaimer: Tax rates and benefits change annually. This guide reflects 2025 rates as announced. Always verify current rates with the Alberta government or CRA for your specific situation.