Alabama Paycheck Calculator
Use the Alabama Paycheck Calculator to estimate net or “take home” pay for salaried employees. Simply input salary details, benefits and deductions, and any other necessary information as prompted below, and let our tool handle the rest.
Where are you employed?
How much do you get paid annual?
How often are you paid?
What is your federal filing status?
Children under 17 and students under 24
All other dependents
Where do you live?
Benefits and Deductions
Federal Income Tax
Alabama State Tax
What Are Payroll Taxes?
Payroll taxes withheld from employee paychecks fund Social Security and Medicare, to which the employer also makes payroll tax contributions.
The Social Security tax is paid by both the employee and the employer at a rate of 6.2% of the employee’s wages. The Medicare tax is also paid by both employee and employer, but at a rate of 1.45%.
Employers are also required to pay taxes under the Federal Unemployment Tax Act (FUTA) and the State Unemployment Tax Act (SUTA). The employer must also collect federal income tax from employee paychecks, and pay that amount to the IRS. The rate is determined by the employee’s tax bracket.
Each state also has specific state payroll taxes that must be withheld and paid.
Alabama Payroll Taxes
In addition to Social Security and Medicare, Alabama assesses state income tax and state unemployment taxes, or SUTA taxes. Depending on your municipality, you may also be responsible for local income taxes.
State and Local Income Tax
Alabama has a progressive income tax system, ranging from 2% to 5%, depending on your tax bracket. Rates also vary between single and married taxpayers:
- 2% on the first $500 of taxable income.
- 4% on taxable income between $501 and $3,000.
- 5% on taxable income over $3,000.
- 2% on the first $1,000 of taxable income.
- 4% on taxable income between $1,001 and $6,000.
- 5% on taxable income over $6,000.
Depending on your location, you may also be responsible for local income taxes. In Alabama, local income taxes typically range from 1% to 2%, but refer to your municipality’s guidelines for exact rates.
Employers are required to withhold state and local income taxes from employee wages.
State Unemployment Tax (SUTA)
State unemployment tax is an employer-paid tax and not withheld from employees. SUTA tax rates in Alabama range from 0.7% to 6.3% for established businesses. The rate for new businesses is 2.7%.
The current SUTA taxable wage base in Alabama is $8,000.
Paying Payroll Taxes
Just as you need an EIN to pay federal payroll taxes, in Alabama you’ll need to register for state withholdings. This can be done online by signing into your account with the Department of Revenue.
If you withheld more than $1,000 in a month, you must file and pay taxes monthly. Otherwise, you’ll file and pay quarterly. You’ll also need to pay SUTA taxes on the Department of Labor website.
Using a Payroll Tax Service
Payroll and payroll taxes come with countless laws and restrictions, which is why many business owners turn to a payroll service provider to ensure their business remains fully compliant. It’s usually less expensive than creating a new staff position for managing payroll, and relatively easy.
You’ll just send over your digital timesheets and relevant information and the service provider will take care of the calculations, payments and taxes, freeing you up to focus on growing your business.
We highly recommend hiring a payroll service — as a busy entrepreneur, you won’t regret it!