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Individual - Sample personal income tax calculation
Last reviewed - 22 December 2022This 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
- 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.
- In Alberta, the following rates are applied to taxable income in 2022.
* 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).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 - 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.
- The taxpayer does not have sufficient tax preference items to be liable for AMT.
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