The salary your employer pays you versus the amount that gets deposited into your bank account will vary due to the various taxes and deductions that are made to salaries in Alberta. The amounts deducted can significantly reduce your take-home pay.
As such, understanding your net income is important, especially when it comes to balancing your budget. Read on to discover how to calculate your net salary in Alberta so you know precisely how much money you’ll be left with to cover all of your life’s expenses.
How To Calculate Your Net Salary In Alberta
There are many online calculators out there that can help you calculate your net salary in Alberta. Here’s how you can calculate your net pay in Alberta:
1. Determine Your Gross Pay
Your gross salary should be detailed on your pay stubs. This is the amount you are paid before any taxes or deductions are subtracted.
2. Add Up All Your Deductions
Your monthly deductions should also be listed on your paycheque and can include things such as income taxes, CPP deductions, union dues, vacation pay contributions, health plan expenses, and so forth. Add up all your deductions to get a sum total for each month.
Keep in mind that the exact amount you must pay in taxes on your salary in Alberta is based on federal and provincial taxes rates and deductions. You’ll need to find out exactly what your applicable tax rates are in order to get an accurate idea of how much to deduct from your pay, which we’ll get into later.
Salary Deductions In Alberta
Net pay is the amount of money that is available to you after your deductions have been subtracted from your gross pay. Also referred to as “take-home pay,” your net pay is the final amount that is deposited into your bank account from your paycheque once all the mandatory and voluntary deductions are made.
Some common deductions include the following:
- Income taxes
- Health plan expenses
- Union dues
- Employment insurance
- Canadian pension plan (CPP)
- Registered Pension Plan (RPP) contributions from your employer
- Registered Retirement Saving Plan (RRSP) contributions
- Childcare expenses
- Professional expenses
All of these deductions will be subtracted from your gross pay and will determine exactly how much you take home.
3. Calculate Your Net Salary
To calculate your net salary in Alberta, first divide your gross salary by 12 to find out your gross monthly pay. Then, subtract the sum of your monthly taxes and deductions from your gross monthly salary.
For instance, if your gross salary is $60,000, your monthly gross pay would be $5,000 ($60,000 ÷ 12). Next, subtract your total deductions from your monthly gross pay. For instance, if the sum of your deductions is $1,500, subtract $1,500 from $5,000 (your monthly gross pay).
In this example, the difference is $3,500, which would be your monthly net salary. Multiply that number by 12 to get your annual net salary, which would be $42,000 in this scenario.
Take-Home Pay Across Canada
- Calculate Your Take-Home Pay In Nova Scotia
- Calculate Your Take-Home Pay In PEI
- Calculate Your Take-Home Pay In Saskatchewan
- Calculate Your Take-Home Pay In Newfoundland and Labrador
- Calculate Your Take-Home Pay In Alberta
- Calculate Your Take-Home Pay In British Columbia
- Calculate Your Take-Home Pay In Ontario
Tax Rates In Alberta
As mentioned, a big chunk of your deductions will come from your federal and provincial tax obligations. In Alberta, your net pay is calculated by subtracting federal and provincial taxes from your annual gross salary. The calculation is as follows:
| GROSS SALARY – FEDERAL TAXES – PROVINCIAL TAXES – CPP – EI = NET SALARY |
Federal Income Tax Rates
Federal income tax paid is based on your specific tax bracket, which is determined by your salary. Different tax brackets come with different tax rates. Generally speaking, the more you earn, the higher your tax rate will be.
Based on the chart below, you would pay a higher percentage in taxes as your salary increases.
| Federal Tax Rate | Federal Income Tax Brackets |
| 15% | Applicable to taxable income up to $57,375 |
| 20.5% | Applicable to taxable income over $57,375 up to $114,750 |
| 26% | Applicable to taxable income over $114,750 up to $177,882 |
| 29% | Applicable to taxable income over $177,882 up to $253,414 |
| 33% | Applicable to taxable income over $253,414 |
Alberta Provincial Income Tax Rates
When calculating your income taxes, keep in mind that the applicable tax rates are calculated based on a progressive tax structure. That means a specific tax rate applies to a set income range. Tax rates typically increase every year due to inflation, so these tax brackets will usually change annually.
The provincial taxes you pay can be calculated using the following chart outlining the tax brackets in Alberta:
| Alberta Tax Rate | Alberta Income Tax Brackets |
| 10% | Applicable to taxable income up to $142,292 |
| 12% | Applicable to taxable income over $142,292 up to $170,751 |
| 13% | Applicable to taxable income over $170,751 up to $227,668 |
| 14% | Applicable to taxable income over $227,668 up to $341,50 |
| 15% | Applicable to taxable income over $341,502 |
Calculating Your Net Take-Home Salary In Alberta
To illustrate how a difference in income can influence how much you pay in taxes in Alberta, let’s compare a $30,000 salary versus an $80,000 salary:
| Gross Salary | Federal Taxes | Provincial Taxes | Total Taxes Paid | Net Annual Salary |
| $30,000 | $4,009 | $2,802 | $6,811 | $23,189 |
| $80,000 | $12,778 | $7,555 | $20,333 | $59,667 |
Net Salary By Income In Alberta
While the federal tax brackets apply all across Canada, the provincial tax will vary by province. The following chart illustrates how the total taxes paid and CPP and EI contributions made are affected by different income levels in Alberta:
| Gross Salary | Federal Tax Deduction | Provincial Tax Deduction | CPP Deduction | EI Deduction | Total Taxes Paid | Net Salary |
| $30,000 | $4,009 | $2,802 | $1,511 | $474 | $8,795 | $21,205 |
| $60,000 | $8,721 | $5,583 | $3,221 | $948 | $18,472 | $41,528 |
| $100,000 | $16,878 | $9,555 | $3,500 | $953 | $30,885 | $69,115 |
| $150,000 | $29,857 | $14,931 | $3,500 | $953 | $49,240 | $100,760 |
Alberta Tax Credits That Can Affect Income Taxes
By reducing your taxable income, you can ultimately reduce the amount you’ll have to pay in taxes. Alberta offers several non-refundable and refundable tax credits to help reduce the amount of provincial tax you would need to pay.
| Non-Refundable Tax Credits in Alberta | Refundable Tax Credits In Alberta |
| – Allowable amount of medical expenses for dependants – Amount for eligible dependants or disabled dependants 18 years or older – Basic personal amount – Caregiver amount – Disability amount – Employment insurance premiums – Medical expenses – Unused tuition and education amounts | – Unused investor tax credit – Stock savings plan tax credit |
Live in Alberta with a disability? Check out the AADL program.
Average Salary In Alberta
According to Statistics Canada, the average salary in Alberta is as follows:
- Average Income In Alberta: $56,100
- Median Income In Alberta $42,500
What Is The Minimum Wage In Alberta?
As of April 01, 2022, the minimum wage in Alberta is $15.00. That would work out to $600 per week assuming 40 hours worked, and $30,000 per year assuming 50 weeks worked.
Based on a minimum wage pay, the taxes paid and net salary would be as follows:
| Gross Salary | Federal Tax Deduction | Provincial Tax Deduction | CPP Deduction | EI Deduction | Total Taxes Paid | Net Salary |
| $30,000 | $4,009 | $2,802 | $1,511 | $474 | $8,795 | $21,205 |
Based on a minimum wage, full-time salary, you can expect to take home $21,205 after taxes and CPP and EI contributions have been made.
Alberta Net Salary FAQs
What’s the difference between gross and net salary?
How much taxes will I pay if I make $50,000 in Alberta?
Why should I calculate my net pay?
Final Thoughts
Your net salary will likely be significantly different from your gross pay in Alberta once all the necessary deductions are made. Knowing what your take-home pay is will help you budget more effectively so you can get a better handle on your finances.
