2023 Alberta Income Tax Calculator
Plug in a few numbers and we’ll give you visibility into your tax bracket, marginal tax rate, average tax rate, and payroll tax deductions, along with an estimate of your tax refunds and taxes owed in 2023.
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Alberta Provincial and Federal tax brackets
Your taxable income places you in the following tax brackets.
| Canadian federal tax bracket | Canadian federal tax rate |
|---|---|
| $53,359 or less | 15.00% |
| $53,359 - $106,717 | 20.50% |
| $106,717 - $165,430 | 26.00% |
| $165,430 - $235,675 | 29.00% |
| More than $235,675 | 33.00% |
| Alberta tax bracket | Alberta tax rate |
|---|---|
| first $142,292 | 10% |
| over $142,292 - $170,751 | 12% |
| over $170,751 - $227,668 | 13% |
| over $227,668 - $341,502 | 14% |
| over $341,502 | 15% |
To calculate your Alberta net income, use the Alberta income tax calculator, which are typically easy tools to use.You’ll be asked to enter your gross salary and your net earnings, which comprise your total earnings minus all deductions and allowances you claim.
Here’s a brief step-by-step guide to finding the amounts you should plug into the calculator.
Determine taxable income by deducting any pre-tax contributions to benefits Annual income is understood to be total income. To be distinguished from this is taxable income. Taxable income is total income less all deductions and credits. Taxes are then payable on this amount. Determine your taxable income by deducting any pre-tax contributions to benefits.
You’ll also need to determine your net salary.. To do this, you just need to take into account the pre-tax deductions for social benefits present in the gross annual salary.
Withhold all applicable taxes (federal and provincial) After filing their tax returns, many Canadians wonder how much their gross salary was compared to their net salary. To answer this question, it is essential to find out how much your tax deductions, social security contributions, and other possible deductions were. To do this, contact your source of pay (employee or self-employed). Then request a tax certificate for your gross salary. Once you receive the tax certificate, you can deduct the gross salary from all deductions, whether they are tax deductions or other possible deductions. The calculation will lead you to your net salary.
Deduct any post-tax contributions to benefits RRSP refers to a registered investment account that allows you to invest by deferring taxes on your investment earnings. This keeps your money invested to a greater extent, allowing it to grow faster. Subtract this contribution from your net pay to determine your taxable pay.
Garnish wages, if necessary In case of wage garnishment, the income must still be declared as taxable income. The background to this is to avoid possible tax evasion as well as overvaluation of the benefit you receive, for example, from child support and alimony payments. This is also called spousal support in Canada.
The result is net income If you have followed the steps already presented, you can calculate your net wage or net income. With this result you can determine how high your tax burden will be in Alberta.
Alberta Employment Income
Self-employment income
Self-employment income
Self-employment income can result from different sources. Here, for example, are those from:
- a business
- a profession
- a commission
- a farm
- or a fishery
RRSP deduction
RRSP deduction
To be able to deduct an RRSP contribution, certain requirements must be met. The main limit considered is your contribution room, which is based on your prior years’ income. In general, there is no minimum age requirement for contributing to your RRSP. The only age restriction is the year you turn 71. This is the last year you can contribute to your RRSP. In the case of a deduction for your spouse, the same applies to the age of your partner.
Capital Gains
Capital Gains
As part of your tax return you have to report capital gains. Enter the amount of capital gains dividends that qualify and that were paid by:
- an investment corporation
- a mortgage investment corporation
- a mutual fund corporation
Eligible Dividends
Eligible Dividends
Canadian source dividends are profits you receive from your share in a corporation. There are two types of dividends, eligible dividends and ineligible dividends, that you may have received from taxable Canadian corporations. We will discuss ineligible dividends in more detail in the next section. If you need more information about the type of dividends you receive, please contact the payer of your dividends.
Dividends are generally reported on the following documents
- T3, Statement of Trust Income Allocations and Designations
- T4PS, Statement of Employee Profit-Sharing Plan Allocations and Payments
- T5, Statement of Investment Income
- T5013, Statement of Income from Partnerships
Ineligible Dividends
Ineligible Dividends
These are considered as other income from Canadian sources. Other income includes taxable dividends and deemed dividends paid to an individual by a Canadian corporation that is not a taxable Canadian corporation.
Other income (incl. CERB/CESB)
Other income (incl. CERB/CESB)
Other payments may include money you received in the form of CESB or awards. Any amounts you received must be reported.
Other incomes to understand in Alberta
What is Interest Income?
What is Interest Income?
Interest is taxable if, for example, you receive it from the bank, a term deposit, a guaranteed investment certificate, or a similar type of investment. Of course, interest can also come from other sources. If the value of taxable interest is more than $50, you will receive a T5 Statement of Investment Income tax slip. Interest income less than $50 must be declared even if you have not received a tax notice for it. When receiving interest from trust funds. In this regard, you will receive a T3 “Statement of Trust Income Allocations and Designations” tax slip.
What is passive income?
What is passive income?
Passive income is the remuneration which you are paid without actively working. This includes, for example:
- Interest on savings accounts
- Investments
- Rentals
- And other forms of investment
However, it does not include capital gains or losses.
Other Income
Other Income
Before filing a tax return, you should thoroughly inform yourself about what other types of income can be earned. Such sources might include:
- Spousal support
- Awards
- Scholarships
Make sure that you have taken all types of income into account.
Understanding Alberta deductions & credits
What are tax exemptions?
What are tax exemptions?
Tax exemptions can often be claimed under certain conditions, andrefer to the amount that can be deducted from the total income. However, these deductions must still be included in the tax return. The deduction in the tax return results in a lower tax liability.
In Alberta, the following exemptions are generally claimed.
CRA Credits
CRA Credits
First and foremost are the CRA tax exemptions. Various offers can be mentioned for this, such as:
- Amounts for volunteer firefighters
- Amounts for volunteers in emergency services
These are credits to reduce your tax payable. For a time you could consider tuition for college or university as a contribution. But, this is no longer possible.
Charitable donations
Charitable donations
It is important to know that in addition to the charitable act, a gift can also result in the reduction of your tax burden. To do so, the donation must only be made to a qualified donee. Qualified donees are considered to be:
- Registered charities (list of charities)
- Registered Canadian amateur sports associations
- Registered national arts associations
- Registered housing associations incorporated in Canada for the sole purpose of providing affordable housing for the elderly
- Registered municipalities in Canada
- Registered municipal or public bodies exercising a governmental function in Canada
- The United Nations and its agencies
- Universities outside Canada whose student body is generally composed of Canadian students who have applied for registration and are registered with the CRA (these universities are no longer required to be listed on Schedule VIII to the Income Tax Regulations)
Student loan interest
Student loan interest
Another type of tax credit may be student loan interest. This also reduces your tax liability as a result. The tax credit is systematically deducted from your income.
Child & dependent care expense
Child & dependent care expense
Another form of tax exemption is the cost of caring for children. These expenses can be claimed if you have children or a dependent.
College education expense
College education expense
In principle, tuition fees are used to reduce your tax payable. Any amounts not used can be carried forward or transferred to someone else. In this way, your tax liability can be significantly reduced.
It is important to know that tuition can still be assessed at the federal level. However, in 2020 this was abolished at the provincial level in Alberta.
Mental health credits
Mental health credits
At the federal level, a lot of different programs have been imposed to ensure that everyone receives adequate mental health treatment. The costs arising from this treatment can be used to reduce your tax liability.
Other deductibles
Other deductibles
Many more eligible deductions could be mentioned. It is only important that the associated requirements are met. These include but are not limited to:
- Moving costs
- Student loan interest repayments
- Disability credit for yourself, a spouse, or dependants
Explore other provincial or territorial tax calculators
FAQs
In Alberta, the tax return filing deadline is April 30. The deadline for self-employed workers is June 15. However, it can be filed after that date. If the return is not filed before this date, you will have to pay a late filing penalty as well as interest on any amounts owed.
The personal income tax rates in Alberta are as follows:
- 10 % for amounts up to $142,292
- 12 % for amounts between $142,292.01 to $170,751
- 13 % for amounts between $170,751.01 to $227,668
- 14 % for amounts between $227,668.01 to $341,502
- 15 % for amounts above $341,502.01
Calculating your Alberta tax burden is done by adding up your total income with allowances and then subtracting the tax deductions for which you qualify. You then need to factor in which marginal tax rate applies to your income level and that will allow you to calculate the percentage of taxes you owe federally and provincially.
Taxes are deducted whenever you receive your wages unless you are self-employed or a contract worker. The deduction amount is based on Alberta's marginal tax rate, which changes depending on your income level.
The carbon tax is about Alberta putting a price on pollution in the atmosphere. This is intended to send a market signal to encourage the economic activities (investment and innovation) desired by the guarantors while reducing the undesirable activities (greenhouse gas emissions).
Because questions can often arise, you should keep your tax records for at least six years after you file your tax return. The reason for this is that they can be used as answers to questions.
The final processing of the tax return depends on the form of submission you choose. However, if you have submitted your tax return electronically, it could be processed within 15 days.
First, determine how much your gross salary is. Subtract from this all tax amounts that are already paid and other expenses. As a result, you will get the taxable income.
Your tax return can be sent directly to the CRA tax centre. Alberta’s tax centre is in Winnipeg. However, with electronic filing, no physical documents need to be mailed.
The tax rate on capital gains in Alberta in 2023 is 25.00% up to the first $53,359 Thereafter, it increases gradually by 1 to 2% until it reaches a tax rate of 48.00% on income of $341,502 or more.
This refers to the amount that is deducted from your salary at the source and transferred to the tax authorities. This is done at a predetermined tax rate depending on the payer and the type of payment. As a rule, this amount is not refundable, but in certain cases you can claim it as a tax refund.
The marginal tax rate is the sum of all taxes and fees that you need to pay with regard to your salary. It is also know as tax brackets.
- 10 % for amounts up to $142,292
- 12 % for amounts between $142,292.01 to $170,751
- 13 % for amounts between $170,751.01 to $227,668
- 14 % for amounts between $227,668.01 to $341,502
- 15 % for amounts above $341,502.01
If the house is your main residence, you do not have to pay taxes, because a so-called main residence exemption applies. This is the case if the property was exclusively your principal residence in each year you owned it.
If the house is not your principal residence, you must report the portion of the capital gain attributable to the years in which you did not designate the property as your principal residence.
These are tax credits that you can claim from the authority. This allows you to reduce the amount of tax you pay. As a rule, these credits cannot be refunded, however, there are cases where they can constitute a refund.
If you want to pay personal income taxes, you can choose between different payment possibilities, such as follows:
- Paying online
- Paying in person
- Paying by mail
A tax on split income (TOSI) applies to certain types of income. This applies to children born in 2003 or later, as well as to amounts received by adult individuals from an affiliate. In cases where TOSI applies, the disability tax credit, the dividend tax credit, and the nonresident tax credit may be used to reduce the tax payable for the year. Form T1206 (Tax on Split Income) can be used to obtain more information.
RRSP, or Registered Retirement Savings Plan, is a type of savings account that allows you to set aside money for retirement. The reduction and the corresponding amount of reduction depends on your RRSP deduction limit and your marginal tax rate.