Updated Checked by the Tax-Services.ca editorial team How we check
Alberta corporate tax is 8% on a corporation’s general income and 2% for a qualifying small business, according to the province. Add the federal rate and a small Alberta company pays about 11% in total on its first $500,000 of active business income. Everything above that line is taxed at a combined 23%.
What are the Alberta corporate tax rates?
Alberta calls its general rate the lowest of any province. It also has no provincial sales tax, though that’s a separate matter from the tax on company profit. Small business status is for Canadian-controlled private corporations, and Alberta says associated corporations must share one $500,000 limit between them. Its corporate income tax page sets out the limit and the sharing rule.
The federal part is a general rate of 15%, or 9% after the small business deduction, per the CRA’s corporation tax rates page. Put the two layers together and you get the numbers below. The comparison column uses Ontario’s rates from the same calculator, and the Ontario small figure is a blend because that province changed its rate mid-2026.
| Level | Alberta | Ontario |
|---|---|---|
| Provincial, small business | 2% | 2.2% from 1 July 2026 |
| Provincial, general | 8% | 11.5% |
| Combined, first $500,000 (small) | 11% | 11.7% for calendar 2026 |
| Combined, above the limit or non-small | 23% | 26.5% |
How much tax does an Alberta company pay?
Suppose your corporation earns $300,000 of active business income. In the corporate tax calculator, that’s $27,000 federal and $6,000 Alberta, so $33,000 or 11.0%. You keep $267,000 in the company.
Now $800,000. The first $500,000 is taxed at 11%, which is $55,000. The remaining $300,000 goes at 23%, which is $69,000. The total is $124,000, an average of 15.5%.
And if the company isn’t a Canadian-controlled private corporation, the small rate doesn’t apply. The same $300,000 then costs $69,000, or 23%. That’s a $36,000 difference.
Associated companies change the maths again. Say Priya in Red Deer owns two connected corporations that earn $300,000 and $200,000. Together they use up the $500,000 limit exactly, so both get the 11% rate. If the second one earned $400,000 instead, the pair would have $700,000 between them, and $200,000 of it would be taxed at 23% no matter how the income was split.
What does the calculator leave out?
Quite a lot, and it says so. It ignores the reduction of the small business limit for large taxable capital, the extra tax when passive investment income is high, associated companies sharing one limit, and tax credits. It also doesn’t count the tax you pay when money comes out to you as salary or dividends.
The Alberta rates and the $500,000 limit come from the province’s own pages, and the federal rates from the CRA. The combined figures are those two added up by the calculator. Treat them as a careful sum, not a rate quoted by one agency.
How do I file an Alberta corporate return?
Alberta’s Tax and Revenue Administration runs the Alberta Corporate Tax Act. A corporation with a permanent establishment in Alberta, such as an office, farm, mine or oil well, pays Alberta tax on the part of its income allocated to the province. The provincial form is the AT1, and it’s separate from the federal T2.
Returns are due within 6 months from the end of a corporation’s tax year.
Corporate income tax, Government of Alberta, alberta.ca
Alberta says that for tax years beginning after 31 December 2024, most corporations must file the AT1 electronically using Net File, with a few exceptions such as insurance and non-resident corporations. Our guide to how you file corporate taxes online covers the federal side.
Common mistakes with Alberta corporate tax
Assuming every company gets 2% is the big one. Only a qualifying Canadian-controlled private corporation does, and only on income up to the shared limit.
Another is forgetting that corporate tax isn’t the whole cost of running the business. Payroll has its own remittances, which the payroll remittance calculator estimates. If you sell to customers in other provinces, the GST and HST calculator shows the sales tax side.
Is a low rate a reason to incorporate? Not by itself.
Getting money out of the company is taxed again, and the bill depends on how you pay yourself, so a low corporate rate can look better on paper than it turns out in your own pocket.
Where we got these figures
The Alberta rates and limit come from the Government of Alberta’s corporate income tax pages. The federal 15% and 9% come from the Canada Revenue Agency‘s corporation tax rates page. All were read in October 2026. This website has no connection with the CRA, the Alberta government or any other government body.
Frequently asked questions
What is the Alberta corporate tax rate?
Alberta says its general rate is 8% and its small business rate is 2%.
What is the small business limit in Alberta?
The province gives $500,000 of active business income for Canadian-controlled private corporations, shared among associated corporations.
What is the combined rate for a small company?
About 11% by our calculator: 9% federal after the small business deduction plus 2% Alberta. The combined figure is our sum, not a quoted rate.
What form do Alberta corporations file?
The AT1, alongside the federal T2. Alberta says most corporations must file it electronically for years beginning after 2024.
Does Alberta have a sales tax?
No. Alberta says it has no provincial sales tax. GST still applies.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
- Alberta income tax and GST in 2026
How Alberta income tax works in 2026: six brackets, an 8% credit rate, no provincial sales tax, no surtax or health premium, and Alberta calculators