2025 Alberta Budget Highlights
On February 27, 2025, Alberta’s Minister of Finance, Nate Horner, tabled the province’s 2025 budget. We have highlighted selected tax measures relevant to individuals and small businesses in Alberta.
INDIVIDUALS
Personal Tax Rates
The budget has introduced a new $60,000 tax bracket, with income taxed at 8%, effective January 1, 2025, reduced from 10%. The province has continued the indexation of tax brackets for the 2025 taxation year.
Most taxpayers will start to see the benefit of the tax cut after July 1, 2025, when payroll withholdings are adjusted.
Provincial Income Tax Brackets and Tax Rates
| Taxable Income | 2024 | Taxable Income | 2025 |
|---|---|---|---|
| $0 up to $148,269 | 10% | $0 up to $148,269 | 8% |
| $60,000 to $151,234 |
10% | ||
| $148,269 - $177,922 | 12% | $151,234 to $181,481 | 12% |
| $177,922 to $237,230 |
13% | $181,481 to $241,497 |
13% |
| $237,230 to $355,845 |
14% | $241,497 to $362,962 |
14% |
| Over $355,845 |
15% | Over $362,961 |
15% |
Top Combined Alberta and Federal Rates - 2025
| Other/Interest/ Salary/Pension | Capital Gains | Eligible Canadian Dividends | Non-eligible Canadian Dividends |
|---|---|---|---|
| 48.00% | 24.00% | 34.31% | 42.31% |
Top rates apply to taxable income over $362,961 based on known federal and provincial rates as of February 27, 2025.
Other Personal Tax Measures
- The new 8% $60,000 tax bracket will save individuals up to $750 in 2025. Taxpayers earning less than $60,000 will see their personal income taxes fall by 20%.
- Budget 2025 introduces a new supplemental personal tax credit equal to 2%. This new credit ensures that those who claim more than $60,000 in non-refundable tax credits do not pay more tax due to the new 8% tax bracket.
- Budget 2025 will end entitlements for the Alberta Climate Leadership Adjustment Rebate and the Alberta Family Employment Tax Credit after December 31, 2025, to eliminate ongoing administration costs by the government. These credits were eliminated in prior years but are still being administered.
Consumer and Other Taxes
- After being previously frozen in the 2024/2025 period, education property tax rates will increase for the 2025/2026 period, based on $1,000 of a property’s equalized assessment.
- Residential/farmland rate will increase from $2.56 to $2.72 per $1,000.
- Non-residential rate will increase from $3.76 to $4.00 per $1,000.
- Fuel tax rates on gasoline and diesel are determined quarterly based on average oil prices. Fuel tax rates are estimated to remain at $0.13 per litre for 2025-26 based on the oil price forecast.
- The government implemented an annual $200 electric vehicle (EV) tax, which was introduced in prior year’s budget.
- The annual tax is effective February 13, 2025, and is charged when Albertans register their electric vehicle.
- Hybrid vehicles are exempt from this tax.
BUSINESSES
The budget did not propose any changes to corporate income tax rates, introduce new corporate tax credits, nor did it change the $500,000 provincial small business income threshold.
2025 Corporate Tax Rates
| Income Type | Provincial | Federal | Combined Rates Calendar 2025 |
|---|---|---|---|
| General corporate | 8.00% | 15.00% | 23.00% |
| Small business – to $500,000 | 2.00% | 9.00% | 11.00% |
| CCPC* investment |
8.00% | 38.67% | 46.67% |
| CCPC* investment income | 8.00% | 15.00% | 23.00% |
| Non-CCPC investment income | 8.00% | 15.00% |
23.00% |
| Manufacturing and processing income | 8.00% | 15.00% | 23.00% |
*Canadian-controlled private corporation (CCPC).
Refer to the 2025 Alberta Budget for further details.
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.
