Alberta Payroll Guide: CPP, EI & Employer Costs (2026)

Running payroll in Alberta means remitting federal statutory deductions only — there is no provincial payroll tax and no employer health tax. As of the 2026 tax year, an Alberta employer's mandatory costs on top of wages are the employer share of the Canada Pension Plan (CPP 5.95%), the second additional CPP (CPP2 4%) and Employment Insurance (EI), plus the income tax you withhold from employees and send to the Canada Revenue Agency (CRA). That absence of a provincial payroll levy is one of the clearest, most underrated pieces of the "Alberta Advantage" for employers.

This guide covers the 2026 rates, what an employee actually costs you, remittance rules, and the registrations you need before your first payday.

Alberta's payroll advantage: no provincial payroll or health tax

Several Canadian provinces fund health care or general revenue through a tax on employer payrolls. British Columbia charges an Employer Health Tax (EHT), Ontario charges an Employer Health Tax, Manitoba and Newfoundland have their own variants, and Quebec has multiple employer levies. Alberta has none of these.

For an Alberta employer, the statutory cost layered on top of gross wages is limited to the federal CPP/CPP2/EI employer portions. There is no provincial percentage applied to total payroll. A BC company with $2,000,000 in payroll, by contrast, pays 1.95% EHT on the whole amount — roughly $39,000 a year that an Alberta company with the same payroll simply does not owe. For growing employers, that gap compounds.

2026 CPP, CPP2 and EI rates for Alberta employers

CPP and EI are federal and identical across Canada (Quebec excepted, which runs its own QPP/QPIP). The figures below are the 2026 statutory amounts, confirmed by the CRA and the Canada Employment Insurance Commission.

Key 2026 facts to year-stamp in your records:

• CPP basic exemption stays at $3,500; no CPP is owed on the first $3,500 of pensionable earnings.
• YMPE rose to $74,600 (from $71,300 in 2025).
• CPP2 applies a 4% second layer on the slice of earnings between $74,600 and the $85,000 second ceiling (YAMPE).
• EI maximum insurable earnings is $68,900; employers always pay 1.4× the employee premium.

The employer must match the employee's base CPP and CPP2 dollar-for-dollar, and pay 1.4× the employee's EI premium.

What one employee actually costs in 2026

Take an Alberta employee earning $85,000 in 2026 (at or above all the ceilings). The employer's mandatory add-on looks like this:

So an $85,000 salary costs an Alberta employer roughly $91,200 all-in before benefits, training or WCB premiums — and nothing of that is a provincial payroll levy. You can model your own numbers with our employer payroll cost calculator, and employees can check their net pay using the take-home pay calculator.

Income tax withholding in Alberta

Beyond CPP and EI, you withhold federal and Alberta provincial income tax from each paycheque and remit it with your deductions. Alberta's personal income tax remains low-rate and broad: as of the 2026 tax year Alberta has a new 8% bottom bracket on the first band of income (introduced for 2025), below the long-standing 10% rate, then graduated rates above. Combined with the federal brackets, Alberta employees generally keep more of each dollar than employees in higher-tax provinces — which is part of why payroll budgeting is simpler here. Use TD1 forms (federal and Alberta) from each employee to set the correct withholding.

Remitting payroll deductions to the CRA

You hold the employee deductions and your employer share in trust and remit them to the CRA. Your remittance frequency is assigned from your average monthly withholding amount (AMWA):

• Regular (monthly) — most new and small employers. Due by the 15th of the month after you pay wages.
• Quarterly — available to small, compliant employers with low AMWA and a clean record.
• Accelerated threshold 1 and threshold 2 — large payrolls remit up to several times a month.

Missing a remittance deadline triggers CRA penalties starting at 3% and rising to 10% for repeated or very late failures, plus interest. Because these are trust funds, the CRA enforces them strictly — directors can be held personally liable for unremitted source deductions.

Before your first payday in Alberta: registrations

1. Business Number + payroll (RP) account — open an RP program account under your business number with the CRA before you run payroll.
2. WCB Alberta — most employers must register for Workers' Compensation Board coverage; a few industries are exempt. WCB premiums are a separate provincial cost based on your industry rate and insurable earnings, not a payroll tax on total wages.
3. TD1 forms — collect a federal and an Alberta TD1 from every employee to calculate withholding.
4. Year-end filing — issue T4 slips to employees and file the T4 Summary with the CRA by the last day of February following the calendar year.

How RN Canada helps

RN Canada is an Edmonton-based accounting and advisory firm (with a Vancouver office) that sets up and runs payroll for Alberta founders and small businesses end-to-end: opening your CRA payroll account, configuring CPP/CPP2/EI and Alberta tax withholding, scheduling remittances so you never trip a CRA penalty, and preparing year-end T4s. Led by Ozgur Duymaz, Ph.D., CPA (Canada), ACCA (UK), CMA (US), our team also advises owner-managers on the bigger payroll question — how much to pay yourself in salary versus dividends. See our bookkeeping & tax filing service to get your payroll on solid footing.

For context on the broader cost picture, compare provinces in our Alberta vs BC business tax guide, or read the Alberta corporate tax guide for the company-level side.