How Living Wages are Calculated


The living wage is defined as the hourly wage a worker needs to earn to cover their basic expenses and participate in the community. It considers the hourly rate of pay needed for a household to maintain a modest standard of living, once government transfers have been added to the family’s income, and taxes have been subtracted. The Alberta Living Wage Network has developed a standard methodology for calculating living wages across the province and worked with Puzzle Rock Coding to calculate them.

The living wage is based on the income needs of the following three household types:

 (1) a two-parent family with two young children, (2) a lone-parent family with one young child, and (3) a single individual living alone. 


It is a weighted average based on how many of each household type there are in Alberta. It considers the hourly rate of pay needed for a household to maintain a modest standard of living, once government transfers have been added to the family’s income and taxes have been subtracted. The methodology assumes that each adult is working full-time hours (35 hours/week) and includes more than the basics of food, clothing and shelter –the calculator also takes into account unexpected costs, small investments in education, child care, and participating in the community.


Based on Canada Mortgage and Housing Corporation’s (CMHC) Housing Market Information Portal , which assumes a 3-bedroom rental apartment or townhouse for the family of four, a 2-bedroom unit for the lone parent family, and a 1-bedroom for the single individual. Numbers from the October 2021 CMHC Rental Market Survey were adjusted to 2022 using Statistics Canada’s Consumer Price Index for shelter in Alberta. Estimates for utilities are based on the Utilities Consumer Advocate’s Cost Comparison Tool as at October 25, 2022. Tenant insurance is based on community-specific Square One estimates as at October 25, 2022. For communities where the CMHC data does not apply (e.g., if there aren’t many rental apartments or townhouses in the community), rental costs were locally sourced.


Based on Health Canada’s 2019 National Nutritious Food Basket (NNFB) adapted by Alberta Health Services for Alberta communities. The cost of the NNFB represents the cost of a basic, healthy diet, that meets nutrition recommendations, and reflects food habits and food purchasing patterns of the population. Registered Dietitians and trained volunteers within specified communities go to grocery stores in their community to determine how much the food basket costs in their community.

The NNFB includes a mix of fresh, frozen, and minimally processed foods that can be purchased at a full-service grocery stores any time of the year. Examples include:

  • Milk, partly skimmed, 2%
  • Red lentils, dried
  • Salmon, pink, canned
  • Carrots, fresh, whole
  • Pasta, whole wheat
  • Vegetable oil, canola

    The amount of each food item required for a family or a single person scenario is determined by the age and sex of the individuals. The cost of the NNFB reflects the cost of all the food items together.

    Visit National nutritious food basket – (Government of Canada, 2020) for more information about the National Nutritious Food Basket and a full list of its content. Please contact for information about the data collection process. 


    Based on the Canadian Automobile Association’s Driving Costs Calculator as at October 25, 2022. The costs represent the average of a lower-cost 8-year-old car, hatchback, truck, and SUV. Expenses assume milage of 10,000 km and include depreciation, maintenance, license and registration fees, insurance costs, monthly car payments (assuming a 15% down payment), and fuel costs. Highway vs. city driving and the price of gas (the average of the last year) are specific to community.

    Communities with public transit assume one vehicle and one transit pass for the family of four, one vehicle for the lone parent family, and the average of a transit pass and a vehicle for the single individual. Communities without public transit assume two vehicles for the family of four (estimated as the cost of one vehicle multiplied by 1.5), one vehicle for the lone parent family, and one vehicle for the single individual.

    Child Care

    Includes the cost of 12 months of child care for the 3-year old, based on each community finding the actual costs of local providers. Also includes 10 months of before- and after-school care and 2 months of day camps for the 7-year-old, based on each community finding the actual costs of local providers. The expenses are after the Affordability Grant is taken into account ($450/month for the 3-year-old). The Alberta Childcare Subsidy is included in calculations for living wages under its income threshold of $180,000 for a family.

    Clothing & Footwear

    Based on Statistics Canada’s Survey of Household Spending (SHS) for the following categories:

    • Women’s and girls’ wear (aged 14+)
    • Men’s and boys’ wear (aged 14+)
    • Children’s wear (under 14 years of age)

    SHS data is reported by income quintile. The income quintile with the lowest expenditure was used, excluding the first income quintile (1st to 20th percentile of income), since many in the first income quintile would not be making a living wage.

    SHS data is based on what the average household spends, so numbers were adjusted based on Statistic’s Canada’s 2021 Census Profile Table for Alberta (2.6 people per household; 19% aged 0–14).

    SHS data was adjusted to 2022 using Statistics Canada’s Consumer Price Index for Clothing & Footwear.

    Health care

    Based on the cost of the premiums for Alberta Blue Cross health insurance. The plan selected is Blue Choice, with Plan B extended health benefits, dental coverage, and prescription coverage. It also includes the cheapest life insurance available from estimates and the cheapest critical illness insurance available from PolicyAdvisor.


    Based on each community finding the actual costs of post-secondary education options in their community. Assumes one parent taking one course per semester (a total of two courses). A tax credit is calculated for tuition and eligible fees. Note that the post-secondary institutions in some communities have a transit pass included in tuition fees, which is taken into account in Transportation expenses for those communities.

    Other household items

    Based on Statistics Canada’s Market Basket Measure (MBM) multiplier for Other expenses (75.4% of food and clothing & footwear). The methodology of the multiplier is based on using the cost of a basket of items for food and clothing & footwear. While our methodology for Food is based on the cost of a basket of items, our methodology for Clothing & Footwear is based on expenditures (Survey of Household Spending), so we use Alberta’s MBM estimate for clothing in this calculation.

    Other household costs are made up of the following expense categories:

    • Telephones and telephone services (This category also includes a phone plan with Public Mobile for each adult, with 5GB of data on a 4G network.)
    • Household supplies
    • Furniture, furnishings, electric appliances
    • Personal care
    • Home entertainment, sports, and recreation
    • Reading materials and supplies
    • Other

    This category includes costs related to participating in the community, including the following:

    • Live sports events
    • Live performing arts
    • Museums
    • Bicycles
    • Sports and recreation facilities
    • Movie theatres

    See page 73 of First Comprehensive Review of the Market Basket Measure of Low Income (Human Resources and Skills Development Canada) for a full list of items included.


    We assume the need to set aside two weeks’ pay so expenses can be covered even when unexpected situations happen and a worker needs to be away from work – whether it’s staying at home sick, moving, bereavement, etc. We calculate the two weeks’ pay at the living wage rate for each community.

    How we calculate inflation

    When calculating expenses we always use the most recent data available. For most expenses, we use the current prices as at the time of calculation. However, for Clothing & Footwear and Shelter, we use the most recent data available and adjust using the Consumer Price Index (CPI) for Alberta. The CPI is calculated monthly. To adjust a number to 2022, we use the average of all available 2022 months at the time of calculation (January to September 2022).

    Tax & benefit programs

    The calculation considers tax deductions (e.g., childcare expenses), tax credits (e.g., tuition), taxes & deductions, and government benefits (e.g., Canada Child Benefit). Where tax and benefit amounts are determined by income, the income at the living wage rate is used.

    There were significant changes in government benefits between 2021 and 2022. In 2022, families did not receive the CCB young child supplement (CCBYCS), which provided $1,200 to the family of four in 2021. The child care affordability grant introduced in 2022 provides child care centres with $450/month for full-time care for a preschool-aged child regardless of the family’s income, in Addition to the Alberta Child Care Subsidy (ACCS). The amount a family would get for the ACCS was significantly reduced, while the annual income threshold was increased from $90,000 to $180,000. While the new child care grant and subsidies now include families with higher income levels than before, for some communities, families at the living wage level did not see much of a change in how much they were paying for child care. On the other hand, some communities that are more expensive to live in were not eligible for the child care subsidy in 2021 at the living wage income level because the family required more than $90,000 of income to cover their expenses – these families are now eligible for thousands of dollars of child care grants and subsidies, so in some communities the living wage rate has decreased in 2022 as a result.