The Alberta government recently introduced legislation to implement personal income tax reductions as part of Budget 2025.
The Financial Statutes Amendment Act, 2025, proposes a new 8% tax bracket for income up to $60,000, set to take effect on January 1, 2025.
This adjustment is expected to provide tax savings of up to $750 for individual taxpayers and up to $1,500 for two-income households. Overall, Albertans are projected to save $1.2 billion in 2025, with savings increasing to $1.4 billion by 2028.
The new tax bracket marks a reduction in personal income tax for those earning under $60,000, who will see their tax burden decrease by 20%.
Other tax brackets have also been adjusted, with thresholds increasing by 2%. For instance, the 10% bracket will apply to incomes between $60,000.01 and $151,234 in 2025, up from the previous threshold of $148,269.
The provincial government anticipates that taxpayers will notice the tax reduction reflected in their paycheques after July 1, 2025.