Alberta workers will see more money in their paycheques starting July 1 as the province implements a new lower personal income tax rate, part of a broader plan to boost affordability for families.
As announced in Budget 2025, the government has introduced a new eight per cent tax bracket for the first $60,000 of income, down from the previous rate of 10 per cent. The province estimates this change will save individual taxpayers up to $750 annually and two-income families up to $1,500.
Payroll deductions will be adjusted this month, meaning most workers will notice the savings in their paycheques right away.
The government expects the tax change to deliver $1.2 billion in relief to Albertans in 2025, growing to $1.4 billion by 2028.
“Now Albertans will start to see that reflected in their paycheques as more money can go to the things that individuals and families think are important,” Premier Danielle Smith said in a statement.
Tax relief as affordability measure
Finance Minister Nate Horner framed the tax cut as a targeted measure to help households manage ongoing financial pressures.
“This tax cut delivers real relief now, right when families need it most,” Horner said.
The move comes as part of the province’s broader effort to position Alberta as a competitive and affordable place to live and work. Alberta continues to have no provincial sales tax, a low corporate income tax rate, and lower fuel taxes than other provinces. According to government estimates, Albertans and Alberta businesses will pay $20.1 billion less in taxes in 2025–26 compared to what they would under any other provincial tax system.
Affordability and Utilities Minister Nathan Neudorf said the income tax change “will have an immediate impact on affordability in this province.”
The Canadian Taxpayers Federation also endorsed the move. “Keeping promises really matters and it’s great that hard-working taxpayers will be saving money on their paycheques in Alberta,” said Kris Sims, the federation’s Alberta director.
