The Government of Alberta has made a tax change which will impact up to two million Albertans.
In Budget 2025, which was released on Feb. 27, the province announced a new eight per cent personal tax bracket for earners up to $60,000, a decrease from the previous rate of 10 per cent.
The new tax rate is expected to save Albertans $750 per individual and $1,500 per two-income family.
"Over the past few years Albertans have faced an unprecedented cost of living crisis, largely due to the irresponsible actions of the federal Liberal government," said Premier Danielle Smith. "That's why Alberta's government is taking action to cut personal income taxes for two million hard-working Albertans - fulfilling our campaign promise - so that Albertans can keep more of their hard-earned dollars to help support their families."
In total, the income tax cut is expected to save residents of the province $1.2 billion in 2025 and $1.4 billion by 2028.
The tax cut is not taking effect immediately; the release announcing the tax cut notes that most earners will notice the change when payroll withholdings are adjusted in July.
“By fast-tracking this new eight per cent tax bracket, Albertans can keep more of their hard-earned money this year," said Finance Minister Nate Horner. "This is just one more way we’re helping Albertans find their way forward during turbulent economic times.”
The release notes that Alberta residents and business owners pay "at least $20.1 billion less in taxes" than if the tax system was the same as other provinces.
"Premier Danielle Smith keeping her promise to cut Alberta’s income tax is great news because it means huge savings for most working families," said Kris Sims, the Alberta director of the Canadian Taxpayers Federation.
"Families are fighting to afford basics right now, and if they can save more than $1,500 per year thanks to this big tax cut, that would cover a month’s rent or more than a month's worth of groceries.”
