Every conversation about Alberta's business competitiveness eventually reaches the same point: no PST, low corporate rates, no land-transfer tax. But one advantage is consistently underweighted in hiring conversations: Alberta levies no employer health tax and no provincial payroll tax. That is not an exemption or a threshold you have to manage around — it is a structural absence that translates, dollar for dollar, into a lower cost-per-hire than your counterparts in British Columbia or Ontario face for the same role.
In mid-2025, with the Alberta labour market tighter than it has been in years, the ability to price a competitive total compensation package while keeping your payroll burden lower than other provinces is a genuine hiring lever. This piece puts the math on the table.
What other provinces pay that Alberta does not
British Columbia — Employer Health Tax (EHT)
BC introduced its Employer Health Tax in 2019 as a replacement for Medical Services Plan premiums. The structure for 2025:
- Payrolls of $1,000,000 or less: exempt.
- Payrolls between $1,000,001 and $1,500,000: 5.85% on the amount above $1,000,000 (the "notch" provision, designed to phase the exemption out smoothly).
- Payrolls above $1,500,000: 1.95% of the total BC remuneration — not just the amount above the threshold.
The notch creates a counterintuitive scenario: a BC employer crossing $1,000,000 in payroll triggers a 5.85% rate on the excess, which is actually more expensive per marginal dollar than the 1.95% rate that applies once you cross $1.5M. Employers sitting near the $1M mark have a real incentive to think carefully about their next hire.
For an employer above $1.5M — the most common position for an established SMB — the effective incremental cost of adding payroll is 1.95 cents per dollar of wage, permanently, regardless of how large the payroll grows.
Ontario — Employer Health Tax (EHT)
Ontario's EHT has been in place since 1990. For 2025:
- Employers with Ontario payroll under $1,000,000 are exempt (the exemption applies through 2028).
- Employers with Ontario payroll above $1,000,000 pay EHT at 1.95% on total Ontario remuneration, with a $1,000,000 exemption deducted from the taxable base (so only the remuneration above the exemption is taxed at 1.95%).
- Employers (or associated groups) with annual Ontario payroll exceeding $5,000,000 lose the exemption entirely and pay 1.95% on the full payroll with no offset.
For most established Ontario SMBs operating above the exemption threshold, the effective payroll burden is the same 1.95% rate as BC.
Alberta — $0
There is no equivalent tax in Alberta. No provincial payroll tax, no employer health levy, no scheduled introduction of either as of the 2025-26 provincial budget. The absence is structural and has been a deliberate policy choice maintained across governments.
Per-employee savings: running the numbers
To make the comparison concrete, consider a single full-time employee earning $75,000 per year — a reasonable benchmark for a skilled trades worker, junior accountant, or experienced logistics coordinator in Alberta in mid-2025.
For an Alberta employer, the provincial payroll cost added on top of that salary is $0 in health/payroll tax.
For the same hire at a BC or Ontario employer with payroll well above the $1.5M threshold (1.95% rate):
- Additional annual cost per $75,000 employee: $1,463
- Over a 3-year retention period: $4,388 per employee
Now scale that across a growing workforce. The table below shows the annual EHT savings an Alberta employer holds compared to a BC or Ontario competitor at the same payroll level.
| Annual Payroll (AB) | Equivalent EHT in BC/ON (1.95%) | Alberta EHT | Annual Savings |
|---|---|---|---|
| $1,500,000 | $29,250 | $0 | $29,250 |
| $3,000,000 | $58,500 | $0 | $58,500 |
| $5,000,000 | $97,500 | $0 | $97,500 |
| $10,000,000 | $195,000 | $0 | $195,000 |
Note: BC figures use the 1.95% rate on total BC remuneration, applicable above $1.5M in BC payroll. Ontario figures assume associated-group payroll exceeds $5,000,000, so the $1,000,000 exemption does not apply; a standalone Ontario employer below that group threshold would pay 1.95% only on remuneration above the $1,000,000 exemption (e.g., $19,500 on $2M payroll rather than $39,000). The BC notch provision creates even higher effective costs for employers between $1M and $1.5M in BC payroll.
These are not projected savings — they are current-period cash the Alberta employer keeps and can redirect to wages, benefits, training, or capital.
What this means for cost-per-hire in a tight labour market
The 2025 Alberta labour market is characterized by historically low unemployment, particularly in skilled trades, technology, and professional services. Attracting workers from BC or Ontario — or retaining Alberta-based workers who receive out-of-province offers — means competing on total compensation.
Here is where the payroll-tax advantage compounds. An Alberta employer who redirects their EHT savings into a more competitive compensation structure is, in effect, using money they would never have collected to win talent.
Consider a hypothetical scenario: two companies competing for the same software developer at $120,000 in annual salary. The Ontario company pays $2,340 in EHT on that hire annually (1.95% × $120,000); the Alberta company pays nothing. Over a 5-year employment period, the Alberta company has $11,700 in employer-side budget that the Ontario competitor does not. That is enough to fund an additional week of paid leave, a professional development budget, or a modest RSP/DPSP contribution — without increasing headline salary.
The no-payroll-tax position also matters for relocation decisions. An established BC or Ontario business evaluating whether to open an Alberta division or relocate operations does not merely benefit from lower corporate tax rates (Alberta's general rate of 8% versus BC's 12% and Ontario's 11.5%); it immediately reduces payroll operating costs from day one of operations, before any profit is earned to tax.
The minimum-wage context
Alberta's general minimum wage has been $15.00 per hour since October 1, 2018 — a detail relevant to entry-level hiring cost. Alberta's minimum wage is among the lowest in Canada as of mid-2025, as several other provinces have increased their rates above that level. In practice, Alberta SMBs competing for reliable entry-level staff often pay meaningfully above the statutory minimum.
The relevant point for this analysis is that the absence of a payroll tax applies across the entire wage spectrum — minimum-wage workers, mid-range professionals, and senior executives alike. An Alberta employer's payroll burden advantage is proportional; it scales with payroll, not just with any specific wage tier.
Administering the advantage
The absence of a payroll health tax also has an administrative dimension that is easy to overlook. BC and Ontario employers must register for EHT, track provincial remuneration accurately, manage instalment payments (required for larger payrolls), file annual returns, and monitor threshold crossings that change their rate or exemption status. For a growing business, the compliance cost — staff time, software configuration, filing deadlines — adds to the financial cost.
Alberta employers have none of this. One fewer tax registration. One fewer set of instalment deadlines. One fewer threshold to monitor. For a mid-market business running a lean finance function, that is a meaningful reduction in administrative friction.
Key takeaways
- Alberta imposes no employer health tax and no provincial payroll tax — unlike BC (EHT at 1.95% above $1.5M payroll, with a 5.85% notch between $1M and $1.5M) and Ontario (EHT at 1.95% above $1M, no exemption above $5M payroll).
- The savings are proportional to payroll size: an Alberta employer with $5M in payroll saves approximately $97,500 annually compared to an equivalent BC or Ontario employer above the exemption threshold.
- In a tight mid-2025 labour market, redirecting those savings into compensation, benefits, or professional development creates a genuine competitive hiring advantage without requiring higher gross wages.
- The advantage applies to every employee at every wage level — entry-level, mid-range, and executive — and compounds across multi-year retention periods.
- There is zero EHT compliance burden in Alberta: no registration, no instalments, no annual filings, no threshold monitoring.
Alberta's payroll-tax-free environment is one of those advantages that works quietly in the background every pay period. For employers actively managing headcount cost and competing for talent, making it explicit — in your hiring budgets, your relocation conversations, and your CFO-level cost modelling — turns a structural fact into a strategic position.
RN Canada Accounting & Advisory helps Alberta employers model total compensation costs, benchmark payroll burden across provinces, and build the financial case for hiring and relocation decisions. If you want a side-by-side Alberta versus BC or Ontario cost-per-hire analysis built for your specific workforce, we can run that model with you.