Canada

Individual - Sample personal income tax calculation

Last reviewed - 22 December 2022

This sample calculation applies to a calendar year ending 31 December 2022.

Assumptions

  • Resident husband and wife living in Alberta; two children (under 18); one spouse earns all the income.
  • Total remuneration of CAD 110,000.
  • Capital gains of CAD 16,000.
  • Foreign interest income of CAD 5,000, from which CAD 750 withholding has been deducted.
  • Other interest income of CAD 6,000.
  • All amounts are in Canadian dollars (CAD).

Tax computation

  CAD CAD
Net income    
Salary   110,000
Interest   11,000
Taxable capital gain (one-half of actual gain) (1)   8,000
Enhanced government pension plan deduction (461)
     
Net income/Taxable income   128,539
     
Income tax (see the Taxes on personal income section):    
Federal tax before credits   25,138
     
Less - Personal credits:    
Basic 2,160  
Spouse 2,160 (4,320)
     
Less - Other credits:    
Employment tax credit 193  
Government pension plan and employment insurance plan contributions tax credit 599 (792)
     
Basic federal tax   20,026
     
Less - Foreign tax credit    
Lesser of 750 and (5,000 / 128,539) x 20,026 = 779   (750)
     
Federal income tax   19,276
     
Provincial (Alberta) income tax (2) before credits 12,854  
     
Less - Personal credits:    
Basic (1,981)  
Spouse (1,981)  
Government pension plan and employment insurance plan contributions tax credit (399)  
     
Alberta tax 8,493 
     
Total income tax (3, 4)   27,769

Notes

  1. Assuming the capital gains are not in respect of qualified farm property, qualified fishing property, or shares of a small business corporation, no capital gains deduction is available.
  2. In Alberta, the following rates are applied to taxable income in 2022.

    Taxable income (CAD)* Tax on first column (CAD) Tax on excess (%)
    Over Not over
    0 134,238 0 10
    134,238 161,086 13,424 12
    161,086 214,781 16,646 13
    214,781 322,171 23,626 14
    322,171   38,661 15
    * In August 2022, the Alberta government announced that the province's personal income tax system will be indexed, retroactive to 1 January 2022 (the province had temporarily suspended indexation in 2020).
  3. Personal tax credits and miscellaneous tax credits are subtracted from the result to determine Alberta tax. The 2022 Alberta personal tax credit for the government pension plan and employment insurance plan contributions is equal to 10% (maximum credit is CAD 399) of the lesser of the base (non-enhanced) amounts payable and the required base premiums for the year.
  4. The taxpayer does not have sufficient tax preference items to be liable for AMT.