Canada

Individual - Sample personal income tax calculation

Last reviewed - 13 June 2025

This sample calculation applies to a calendar year ending 31 December 2025.

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 (1,074)
     
Net income/Taxable income   127,926
     
Income tax (see the Taxes on personal income section):    
Federal tax before credits   23,507
     
Less - Personal credits:    
Basic 2,339  
Spouse 2,339 (4,678)
     
Less - Other credits:    
Employment tax credit 213  
Government pension plan and employment insurance plan contributions tax credit 643 (856)
     
Basic federal tax   17,973
     
Less - Foreign tax credit    
Lesser of 750 and (5,000 / 127,926) x 17,973 = 702   (702)
     
Federal income tax   17,271
     
Provincial (Alberta) income tax (2) before credits 11,593  
     
Less - Personal credits:    
Basic (1,786)  
Spouse (1,786)  
Government pension plan and employment insurance plan contributions tax credit (355)  
     
Alberta tax 7,666 
     
Total income tax (3, 4)   24,937

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 2025.

    Taxable income (CAD) Tax on first column (CAD) Tax on excess (%)
    Over Not over
    0 60,000 0 8
    60,000 151,234 4,800 10
    151,234 181,481 13,923 12
    181,481 241,974 17,553 13
    241,974 362,961 25,417 14
    362,961   42,355 15
  3. Personal tax credits and miscellaneous tax credits are subtracted from the result to determine Alberta tax. The 2025 Alberta personal tax credit for the government pension plan and employment insurance plan contributions is equal to 8% (maximum credit is CAD 355) 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.