Provincial tax
Alberta Business Tax Rates for 2026
Alberta's combined small business rate is 11% and it has no PST or payroll tax. A corporation also files a separate AT1 return with the province.
By HBT AccountingSources checked 4 min read
Key points
- 11% combined on the first $500,000 of active business income
- 23% combined general corporate rate
- 5% GST and no provincial sales tax
- No provincial sales tax, payroll tax or health premium
Corporate tax rates in Alberta
Alberta charges 2% on active business income up to $500,000 and 8% on everything else. Add federal tax and a Canadian controlled private corporation pays 11% on its first $500,000 and 23% above that, the lowest general rate of any province.
The $500,000 threshold belongs to the group, not to each company. Corporations that are associated with each other, usually because the same people control them, share one threshold between them.
| Rate | Alberta | With federal tax |
|---|---|---|
| Small business rate | 2% | 11% |
| General rate | 8% | 23% |
| Income the small business rate covers | $500,000 | Same federal limit |
Sales tax in Alberta
There is no provincial sales tax in Alberta. A business charges 5% GST once its taxable sales pass the $30,000 small supplier threshold, files GST returns with the CRA, and claims input tax credits for the GST it pays on business costs.
Selling into another province changes the rate you charge, not where you file. An Alberta business shipping goods to a customer in Ontario charges Ontario's 13% HST on that sale and still reports it on its own GST/HST return.
Alberta income tax brackets for 2026
Alberta taxes the first $61,200 of income at 8%, below the 10% that used to be its lowest rate, and climbs through six brackets to 15% on income above $370,220.
There is no Alberta health premium, so the brackets below are the whole provincial picture. Federal tax applies on top of them, which puts the combined top rate at 48%.
| Taxable income from | Up to | Rate |
|---|---|---|
| $0 | $61,200 | 8% |
| $61,200.01 | $154,259 | 10% |
| $154,259.01 | $185,111 | 12% |
| $185,111.01 | $246,813 | 13% |
| $246,813.01 | $370,220 | 14% |
| $370,220.01 | No upper limit | 15% |
Payroll costs in Alberta
Alberta has no payroll tax and no employer health tax, which sets it apart from Ontario, British Columbia, Manitoba, Quebec and Newfoundland and Labrador. An Alberta employer's payroll costs are the federal ones: CPP, EI and the income tax it withholds and remits to the CRA.
Workplace insurance runs through the Workers' Compensation Board of Alberta, with premiums set by industry and by the earnings an employer reports.
Two corporate returns, one of them Alberta's
Alberta is one of two provinces that collect their own corporate income tax. A corporation with a permanent establishment in Alberta files the federal T2 with the CRA and a separate AT1 return with Alberta Tax and Revenue Administration, and both are due within six months of the year end.
For tax years that begin after December 31, 2024, the AT1 has to be filed electronically through Alberta's net file service. The exclusions are insurance corporations, non resident corporations, corporations that report in a functional currency, and corporations exempt from Alberta tax under section 35 of the Alberta Corporate Tax Act. Corporations newly incorporated with the Alberta Corporate Registry from April 1, 2026 receive their Alberta tax correspondence through online mail by default, with paper available on request, so somebody needs working access to the account from the first year.
Alberta questions, answered
Does an Alberta corporation file a separate provincial return?
Yes. Alongside the federal T2, a corporation with a permanent establishment in Alberta files the AT1 with Alberta Tax and Revenue Administration within six months of its year end. It has to file electronically unless it is an insurance corporation, a non resident corporation, a corporation that reports in a functional currency, or exempt from Alberta tax.
Is there PST in Alberta?
No. Alberta businesses charge only the 5% GST, which the CRA administers.
What is the small business tax rate in Alberta?
11% combined, 2% Alberta and 9% federal, on up to $500,000 of active business income for a Canadian controlled private corporation.
The Alberta small business rate in detailMore for Alberta businesses
Official sources
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Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.