Alberta corporate tax rate 2026: 8% general, 2% small business

A CCPC pays 11% combined on its first $500,000 in Alberta and 23% above it

Each combined rate is the federal net rate plus the Alberta rate on the same income. The table assumes all taxable income is earned in Alberta.

Alberta's general rate is 8% and its small business rate is 2%, which is the 8% rate less a 6% small business deduction on a $500,000 threshold. Alberta has no separate manufacturing and processing rate alberta.ca. The province describes its 8% general rate as the lowest among Canadian provinces alberta.ca.

On the federal side, the 38% basic rate drops to 28% after the 10% abatement. The general tax reduction brings it to 15%, and a CCPC claiming the small business deduction pays 9% instead canada.ca. Federal manufacturing and processing profits get a deduction equal to the general rate reduction percentage laws-lois.justice.gc.ca, so they also land at 15%. Every province side by side is on our corporate tax rates by province page.

Alberta has charged 8% since July 1, 2020, and 2% on small business income since 2017

Neither Alberta rate changed for 2026. As of October 2026, alberta.ca lists the 8% general rate and 2% small business rate as effective July 1, 2020 alberta.ca, and the Alberta Corporate Tax Act consolidated to March 26, 2026 still sets the general rate at 8% for days after June 30, 2020 (section 21) and the deduction at 6% (subsection 22(2.1298)) kings-printer.alberta.ca.

The Act prorates a rate change by days, so the history only matters when you reassess or amend an older return that straddled one of these dates. A year that began after June 30, 2020 is at 8% and 2% throughout.

$600,000 of active business income costs $78,000 in Alberta

Take a CCPC with a December 31, 2026 year end, $600,000 of active business income earned entirely in Alberta, no associated corporations, taxable capital under $10 million and adjusted aggregate investment income of $50,000 or less in 2025. The first $500,000 gets the small business deduction and the other $100,000 is general rate income.

Total tax is $78,000, an effective rate of 13%. The same client in Ontario pays $84,979.45 for calendar 2026, because Ontario charges 11.5% on general rate income and a blended 2.70% on small business income that year. The full Ontario build is on our Ontario corporate tax rate page.

The federal 19% comes from ITA 125(1.1) and the $500,000 from 125(2) laws-lois.justice.gc.ca. Who qualifies, short years and how associated corporations split the limit are covered in small business deduction 2026.

Alberta copies both federal grinds, so passive income costs twice as much as in Ontario

Alberta borrows the federal business limit. Section 22 of the Alberta Corporate Tax Act defines it by reference to ITA 125(2), and subsection 22(4) applies ITA 125(5), (5.1) and the related subsections for Alberta purposes kings-printer.alberta.ca. So the taxable capital grind ($10 million to $50 million) and the passive income grind ($50,000 to $150,000 of adjusted aggregate investment income) cut the Alberta limit exactly as they cut the federal one.

Federally, 125(5.1) reduces the limit by the greater of the two grinds. The passive one is $500,000 ÷ $500,000 × 5 × (AAII minus $50,000), counting the associated group's income for tax years ending in the preceding calendar year laws-lois.justice.gc.ca. Take the same CCPC with $100,000 of AAII in 2025: its limit falls to $500,000 less 5 × $50,000, or $250,000, in both jurisdictions.

Total tax rises from $78,000 to $108,000. The $30,000 is the $250,000 of lost limit times 12 points: 6 federal and 6 Alberta. Ontario ignores the passive grind, so the same facts cost an Ontario client only the $15,000 federal piece. How AAII is measured and planned around is on our passive income SBD grind page.

Investment income pays 46.67% up front and 16% after the refund

The general rate reduction doesn't apply to a CCPC's aggregate investment income, because ITA 123.4 removes it from full rate taxable income laws-lois.justice.gc.ca. ITA 123.3 then adds a refundable tax of 10 2/3% laws-lois.justice.gc.ca. That's 38% less 10% plus 10.67%, or 38.67% federal. Alberta has no separate investment income rate, so its 8% applies, for 46.67% combined.

Of that, 30 2/3 points go into the corporation's refundable dividend tax on hand under ITA 129(4). They come back as a dividend refund of 38 1/3% of taxable dividends paid, other than eligible dividends, up to the balance laws-lois.justice.gc.ca.

On $10,000 of interest income, the corporation pays $4,666.67 (federal $3,866.67, Alberta $800). Once it pays $8,000 of taxable dividends that are not eligible dividends, $3,066.67 comes back, leaving $1,600 of permanent corporate tax, which is 16%. The Alberta 8% is never refunded. The mechanics are on our RDTOH explained page.

Why Alberta tax goes on the AT1, not the T2

Alberta collects its own corporate tax. The CRA rate table leaves Alberta out because the province has no corporation tax collection agreement with the CRA canada.ca. A corporation with a permanent establishment in Alberta at any time in the year files an AT1 with Alberta Tax and Revenue Administration, unless it is exempt, and the return is due within six months of year end alberta.ca.

Payment runs on Alberta's own schedule. Instalments are due monthly, on the last day of each month. Any balance is due by the end of the second month after year end, or the third month for a CCPC that meets the criteria. For tax years beginning after December 31, 2024, most corporations must file the AT1 electronically through net file alberta.ca. The federal side is on our corporate tax instalments page.

Associated groups can't split the limit differently for Alberta. The agreement filed with Alberta may not allocate a corporation a different amount than the agreement filed with the CRA, and an assignment under ITA 125(3.2) is deemed to apply for Alberta too kings-printer.alberta.ca.

A corporation with permanent establishments in more than one province pays Alberta's rates only on the share of income allocated to Alberta. For the small business deduction, the Act uses the Alberta allocation factor computed as if the corporation had no permanent establishment outside Canada kings-printer.alberta.ca.