Alberta’s marginal tax rates for 2026 combine provincial and federal income tax into brackets that start at 22% on income above roughly $22,769 and climb to 48% on income above $370,220. Your marginal rate is the percentage that applies to your next dollar of income, not to your whole paycheque. Alberta uses six provincial brackets and the federal government uses five, so the combined rate shifts each time either system crosses a threshold.
Combined Marginal Rates for 2026
Because Alberta and federal brackets don’t line up at the same income levels, the stacked rate steps up at every point where either system moves into a new tier. For ordinary income like employment earnings, interest, and rental income, the 2026 combined marginal rates in Alberta are:
- 0% on income up to $16,452 (below the federal basic personal amount)
- 14% on $16,453 to $22,769 (federal tax only; below Alberta’s basic personal amount)
- 22% on $22,770 to $58,523
- 28.5% on $58,524 to $61,200
- 30.5% on $61,201 to $117,045
- 36% on $117,046 to $154,259
- 38% on $154,260 to $181,440
- 41.29% on $181,441 to $185,111
- 42.29% on $185,112 to $246,813
- 43.29% on $246,814 to $258,482
- 47% on $258,483 to $370,220
- 48% on $370,221 and above
The extra 0.29% you see in three middle brackets comes from the federal basic personal amount being gradually clawed back for incomes between $181,441 and $258,482. It’s a small addition, but it exists and affects the math if you’re calculating precisely.
One point that trips people up: crossing into a higher bracket does not mean your entire income gets taxed at the new rate. If you earn $62,000, the first $61,200 still sits in the lower Alberta tier and only the last $800 is taxed at the next rate up. A raise always leaves you with more take-home pay.
Alberta Provincial Brackets
Alberta levies its own income tax under the Alberta Personal Income Tax Act, with the Canada Revenue Agency collecting it on the province’s behalf through a federal-provincial tax collection agreement.1Department of Justice Canada. Federal-Provincial Fiscal Arrangements Act For 2026, the province uses six brackets, including the newer 8% tier that replaced what used to be a flat 10% starting rate:
- 8% on the first $61,200
- 10% on $61,200.01 to $154,259
- 12% on $154,259.01 to $185,111
- 13% on $185,111.01 to $246,813
- 14% on $246,813.01 to $370,220
- 15% on $370,220.01 and above
All six thresholds are indexed for inflation each year. The 2026 indexation factor is 2%, which nudges each bracket boundary slightly higher than 2025.2Government of Alberta. Alberta Taxes and Levies Overview The 8% bracket saves every Alberta taxpayer up to $1,224 in provincial tax compared to the old structure where that same income would have been taxed at 10%.
Federal Brackets
On top of provincial tax, every Canadian pays federal income tax. For 2026, the federal government uses five brackets, and the lowest rate has dropped to 14% from the previous 15%:
- 14% on the first $58,523
- 20.5% on $58,523.01 to $117,045
- 26% on $117,045.01 to $181,440
- 29% on $181,440.01 to $258,482
- 33% on $258,482.01 and above
These thresholds are also indexed at 2% for 2026.3Canada Revenue Agency. Income Tax Rates and Income Thresholds The one-percentage-point cut to the bottom bracket saves up to about $585 for anyone earning above $58,523, since the reduction applies to every dollar in that first tier.
Basic Personal Amounts
Before any income gets taxed, you receive a non-refundable credit based on the basic personal amount. The credit effectively makes your lowest dollars tax-free, which is why the combined table above shows a 0% band at the bottom.
For 2026, the Alberta basic personal amount is $22,769. You owe zero provincial tax on your first $22,769 of income. The actual credit is calculated by multiplying $22,769 by the lowest Alberta rate of 8%, producing a provincial tax reduction of about $1,822.2Government of Alberta. Alberta Taxes and Levies Overview
The federal basic personal amount works the same way but with a twist for higher earners. The maximum federal basic personal amount for 2026 is $16,452, available to anyone with net income of $181,440 or less. Above that threshold, the amount gradually shrinks until it reaches $14,829 for individuals with net income over $258,482.4Canada Revenue Agency. Payroll Deductions Tables – General Information The federal credit is calculated at 14%, so the maximum is worth about $2,303 and the minimum about $2,076. High earners still get the credit; it’s just slightly smaller. That gradual clawback is where the 0.29% add-on in the three middle brackets comes from.
How Investment Income Is Taxed Differently
The combined rates above apply to ordinary income. Capital gains and Canadian dividends face different effective rates, which matters for anyone earning investment income in Alberta.
Capital Gains
Only 50% of a capital gain is included in your taxable income. If you sell an investment for a $10,000 profit, just $5,000 gets added to your income and taxed at your marginal rate. At a 48% combined marginal rate, that works out to an effective tax rate of 24% on the gain. At the 22% combined bracket, the effective rate drops to 11%. A proposed increase to a two-thirds inclusion rate was announced and then deferred, and the federal government subsequently dropped the idea, keeping the rate at 50% for 2026.5Canada Revenue Agency. Government of Canada Announces Deferral in Implementation of Change to Capital Gains Inclusion Rate
Dividends
Canadian dividends receive preferential treatment through a gross-up and tax credit system. Eligible dividends, typically paid by large public corporations, are taxed at lower rates than ordinary income. In Alberta for 2026, the combined marginal rate on eligible dividends ranges from 0% at lower incomes to 34.31% at the top bracket. Non-eligible dividends, usually from smaller private companies, face rates from about 12.40% to 42.30%. Dividend income is meaningfully more tax-efficient than the same amount earned through employment, though the exact benefit depends on your bracket.