JET747

Been trying to understand the income tax system.

For Alberta from what I understand for the first 40970 you pay 25%
For 40970 to 81941 you pay tax at 32%.

Do you have a tax allowance like here in the UK ?

Any other tips etc gratefully received.

JET

Aviator

Tax system is provincial and federal, so not a straightforward as a blanket deduction. http://www.taxtips.ca/calculators/taxcalculator.htm

JonboyE

http://www.taxtips.ca/taxrates/ab.htm

Yes, that is correct. But ...

You get Federal and provincial "personal amounts". Like all tax credits these are at the basic rate only. This effectively means that the first $10,382 you earn is taxed at 0% and the next $6,443 at 15%. Then you are taxed at 25% on the next $24,145 (up to $40,970), then at 32% and so on.

There are many other tax credits http://www.taxtips.ca/nrcredits/nrcredits2010base.htm

Taxation in AB is not very progressive IMO. Top earners pay the lowest rate in Canada but low to middle income people have a relatively high marginal rate for modest earnings.