How the Alberta Combined Tax Rate Compares to Other Provinces
October 18, 2025
When looking at personal finance, understanding how your income is taxed is a big deal. This is especially true when you consider how different provinces in Canada handle income tax. Alberta often gets talked about for its tax structure, and for good reason. Let’s break down the Alberta combined tax rate and see how it stacks up against other provinces.
Alberta’s tax system is straightforward, much like most other provinces in Canada. It uses a progressive tax structure, which means the more you earn, the higher the tax rate applied to certain portions of your income. This isn’t unique to Alberta; it’s how the federal government and most provinces handle income tax. Your income for tax purposes is the total of all your earnings – from jobs, investments, pensions, you name it – minus any deductions you’re allowed. This final figure, your taxable income, is what determines which tax bracket you fall into.
One of the big things that makes Alberta stand out is its Basic Personal Amount. This is the amount of income you can earn before you have to pay any income tax at all. Alberta’s Basic Personal Amount is quite a bit higher than the federal one. For 2024, it was $21,885 in Alberta, compared to $15,705 federally. Plus, Alberta has a relatively low starting tax rate. The first chunk of your income, up to $148,269, is taxed at just 10%. When you add to this the fact that Alberta doesn’t have a provincial sales tax, payroll tax, or health premiums, it’s clear why Albertans often end up paying less tax overall and keeping more of their hard-earned money.
Here’s a quick look at Alberta’s provincial tax brackets for 2024:
| Taxable Income | Tax Rate |
| $148,269 or less | 10% |
| $148,269.01 – $177,922 | 12% |
| $177,922.01 – $237,230 | 13% |
| $237,230.01 – $355,845 | 14% |
| Over $355,845 | 15% |
It’s important to remember that these are just the provincial rates. You also pay federal income tax on top of these, which changes the overall picture. We’ll get into those combined rates later on.
When we talk about taxes in Alberta, it’s important to remember that you pay both federal and provincial income tax. These combine to form your total tax rate. Alberta’s system, like most of Canada, uses a progressive structure. This means that as your income goes up, the rate you pay on those higher earnings also increases. It’s not like you suddenly jump to a higher rate on all your income; only the portion of your income that falls into a new, higher bracket gets taxed at that new rate.
For 2025, Alberta’s provincial tax brackets are set up like this:
It’s the combination of these provincial rates with the federal tax rates that determines your actual marginal tax rate. For example, if you earn income that falls into Alberta’s 13% bracket, you’ll also pay the federal tax rate applicable to that same income level, and those two rates add up. Understanding these brackets helps you see how much tax you’ll pay on each additional dollar you earn, which is what ‘marginal’ means in this context. This structure is pretty standard, but the specific dollar amounts for each bracket change annually to keep up with inflation, so these numbers are always worth checking each year.
When we look at how Alberta stacks up against other provinces, especially concerning the highest tax rates people might face, it’s helpful to see the numbers laid out. Alberta generally has lower top combined marginal tax rates compared to many other Canadian provinces. This means that for every extra dollar earned above a certain high income threshold, Albertans often keep a bit more of it than residents in places like Quebec or Nova Scotia.
Here’s a look at how Alberta’s top combined marginal tax rates compare, keeping in mind these figures include both federal and provincial taxes:
It’s important to remember that these are marginal rates, meaning they only apply to the portion of income that falls into the highest bracket. The overall tax burden is influenced by all the lower brackets as well. Still, this snapshot gives a clear picture of where Alberta stands at the higher end of the income spectrum.
While Alberta’s top marginal rate might seem high, it’s crucial to consider the income levels at which these rates kick in. Alberta’s highest bracket starts at a significantly higher income point than several other provinces, which can make a difference for high earners.
When we talk about taxes, it’s not just about the rate on the last dollar you earn, which is the marginal rate. What really matters for your wallet is the effective tax rate – what percentage of your total income actually goes to taxes. This is where things get interesting when comparing provinces, and Alberta often shows a different picture than its marginal rates might suggest.
Alberta’s tax system, with its lower provincial rates and no provincial sales tax, generally means that people keep more of their money, especially at lower to middle income levels. This is partly due to Alberta having the highest Basic Personal Amount in Canada, meaning a larger chunk of income is tax-free. Plus, that first provincial tax bracket is quite generous.
Let’s look at how this plays out:
It’s also important to remember that this analysis focuses on income tax. Other taxes, like property taxes or specific levies, can affect the overall financial picture, but for income tax specifically, Alberta’s structure tends to be quite favourable.
The actual amount of tax paid is a result of a combination of federal and provincial rates applied to different income brackets, deductions, and credits. Therefore, looking at the effective tax rate provides a more realistic view of an individual’s tax burden than just focusing on the highest marginal rate.
For a long time, Alberta has been known for its relatively low tax burden compared to other Canadian provinces. This advantage stems from a combination of factors, including lower provincial income tax rates and the absence of a provincial sales tax, payroll tax, or health premiums. This has historically allowed Albertans to keep more of their earned income.
However, it’s important to look at how this advantage holds up, especially when considering combined federal and provincial tax rates. While Alberta’s provincial rates are often competitive, the federal tax component is the same for everyone. When you add them together, the picture can shift.
Here’s a look at how Alberta’s combined marginal tax rates stack up against other provinces at certain income levels. Keep in mind that these are marginal rates, meaning they apply only to the portion of income within a specific bracket.
| Province | Lowest Combined Rate | Highest Combined Rate |
| Alberta | 25.00% | 48.00% |
| British Columbia | 29.70% | 47.70% |
| Ontario | 29.65% | 43.41% |
| Saskatchewan | 30.50% | 44.50% |
It’s also worth noting Alberta’s higher Basic Personal Amount (BPA). For 2024, Alberta’s BPA is $21,885, which is significantly higher than the federal BPA of $15,705. This means Albertans can earn more income before paying any provincial tax at all.
While Alberta’s tax structure has traditionally offered a clear advantage, changes in tax policies and inflation adjustments across all provinces mean that the gap can narrow or widen over time. It’s a dynamic situation that requires ongoing attention.
Despite the general trend of lower taxes, the specific impact on an individual Albertan depends heavily on their income level and the types of income they earn (employment, capital gains, dividends, etc.). The progressive nature of income tax means that higher earners will always pay a larger percentage of their income in taxes, regardless of the province.
When we look at how Alberta’s tax system stacks up against other places, especially across North America, it’s interesting to see where it fits. Canada, as a whole, has a different tax structure than the United States, with Canada having a federal and provincial system for income tax, while the US has federal, state, and sometimes local taxes. Alberta’s approach, with its lower overall tax burden compared to many other Canadian provinces, also tends to position it favorably when you consider the broader North American context.
Alberta’s relatively low tax rates, particularly its absence of a provincial sales tax and health premiums, often make it an attractive place for individuals and businesses. This can be a significant factor for people deciding where to live or invest.
Here’s a general look at how Alberta’s top combined marginal tax rates might compare to some US states, keeping in mind that US state income taxes vary widely, and some states have no income tax at all:
It’s important to remember that this is a simplified comparison. The actual tax burden depends on many factors, including deductions, credits, and the specific types of income earned (like capital gains or dividends, which are taxed differently in Canada and the US).
While Alberta’s tax rates are competitive within Canada, the absence of a provincial sales tax is a key differentiator when looking south of the border. This, combined with generally lower income tax rates for many income levels, contributes to Alberta’s unique fiscal position.
Even with changes, Alberta keeps a distinct tax profile. A big part of this is its low overall tax burden compared to many other provinces. This isn’t just about income tax brackets, though. Alberta doesn’t have a provincial sales tax, which is a significant saving for everyday purchases. Plus, there are no health premiums or payroll taxes to worry about, unlike in some other parts of Canada.
When you look at the combined federal and provincial rates, Alberta often comes out ahead, especially for middle to higher incomes. This is partly because its initial tax bracket is quite large and taxed at a lower rate.
Here’s a quick look at how Alberta’s top combined marginal tax rates stack up against a few other provinces for 2024:
| Province | Top Combined Marginal Tax Rate |
| Alberta | 48% |
| Ontario | 53.53% |
| British Columbia | 53.5% |
| Quebec | 53.31% |
It’s also worth noting Alberta’s Basic Personal Amount (BPA). For 2024, Alberta’s BPA is higher than the federal amount, meaning residents can earn more before paying any provincial income tax at all. This difference, while seemingly small, adds up.
While other provinces have introduced or increased various taxes, Alberta has largely maintained a simpler, lower-tax environment. This approach aims to attract and retain residents and businesses by allowing individuals to keep more of their earned income.
So, while tax rates are always changing, Alberta’s commitment to a lower tax structure, particularly with the absence of sales tax and health premiums, continues to be a major draw.
So, how do these tax rates actually affect people in Alberta, depending on how much they earn? It’s not a one-size-fits-all situation, obviously.
For folks just starting or earning a modest income, Alberta’s tax structure, especially with its higher basic personal amount, means a good chunk of their earnings is kept. This is a pretty big deal when you’re trying to make ends meet.
As income rises, the progressive tax system kicks in. This means higher earners pay a larger percentage of their income in taxes. Alberta’s top combined marginal tax rate, while competitive compared to some provinces, does increase significantly for those earning over $148,269.
Here’s a simplified look at how income levels might be taxed in Alberta, combining federal and provincial rates for 2024 (note: these are simplified examples and don’t include all possible deductions or credits):
| Taxable Income Bracket | Combined Marginal Tax Rate (Approx.) |
| Up to $55,867 | ~25% |
| $55,867 to $111,733 | ~30.5% |
| $111,733 to $148,269 | ~36% |
| $148,269 to $177,922 | ~38% |
| Over $355,845 | ~47% |
It’s also worth remembering that Alberta has no provincial sales tax, no payroll tax, and no health premiums. These factors contribute to a lower overall cost of living and a greater ability for Albertans to keep more of their money, regardless of income level, when compared to many other provinces.
The progressive nature of Alberta’s tax system means that while lower-income earners benefit from lower rates on their initial earnings, higher-income earners contribute a proportionally larger share. This structure aims to balance the tax burden across different economic strata.
Ultimately, while Alberta often boasts lower overall tax burdens, the impact on individuals really depends on their specific income and how it falls within the various tax brackets. The absence of certain provincial taxes, however, provides a consistent advantage across the board.
Alberta uses a progressive tax system, meaning people with higher incomes pay a larger percentage of their income in taxes. This system is similar to federal taxes and most other provinces. Your tax rate depends on how much money you earn in a year, with different rates applying to different income ranges, called tax brackets. These brackets are adjusted yearly for inflation.
For 2025, Alberta’s combined tax rates (including federal taxes) start at 10% for the lowest income bracket. As your income increases, you move into higher tax brackets with higher rates. For example, the lowest tax rate is 10% on income up to $148,269, but it goes up to 15% on income over $355,845.
Alberta has a higher Basic Personal Amount, which is the amount of income you can earn before paying any tax. For 2024, Alberta’s amount was $21,885, which is more than the federal amount. Also, Alberta has no provincial sales tax, payroll tax, or health premiums, which helps Albertans keep more of their earnings.
Alberta’s tax rates are generally lower than those of many other Canadian provinces, especially at higher income levels. While all provinces have progressive tax systems, Alberta’s initial tax rate and its highest tax rate are often less than what is found in provinces like British Columbia, Ontario, or Quebec. This means Albertans often pay less income tax overall.
Yes, Alberta offers specific tax credits. For instance, the Alberta Child and Family Benefit (ACFB) is a non-taxable payment for families with children under 18, helping lower-income families. These provincial credits can further reduce the tax burden for eligible residents.
Alberta’s tax advantage tends to be more noticeable at higher income levels. While the province offers lower rates across the board compared to some others, the difference becomes more significant as incomes rise. However, even for lower and middle incomes, Alberta’s tax structure, combined with its lack of certain other taxes, often results in a lower overall tax burden.
