Alabama payroll tax rates
Unemployment tax, income tax withholding, minimum wage and paid leave in Alabama, each with its effective date and the agency page it comes from.
Unemployment insurance
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | Alabama Department of Workforce (opens in a new tab) | Alabama Department of Workforce, Employers (opens in a new tab) | |
| Taxable wage base | $8,000 | Alabama Department of Workforce, Employers FAQ (opens in a new tab) | |
| Wage base set each year | No | Code of Alabama 1975, §25-4-16 (opens in a new tab) | |
| New employer rate | 2.7%2.70% of the first $8,000 of each employee's wages until the employer qualifies for an experience rateSurcharges included | Code of Alabama 1975, §25-4-51 (opens in a new tab) | |
| Employee contribution | None | Code of Alabama 1975, §25-4-51 (opens in a new tab) | |
| When an employer becomes liable | One or more workers on some day in 20 different weeks in the current or preceding year, or $1,500 in wages in any calendar quarter (household: $1,000 cash wages in a quarter; agricultural: 10 workers in 20 weeks or $20,000 in a quarter). | Alabama Department of Workforce, Employers FAQ (opens in a new tab) | |
| Quarterly report due | Last day of the month after the quarter: January 31, April 30, July 31, October 31 | Alabama Department of Workforce, Employers FAQ (opens in a new tab) | |
| FUTA credit reduction | Not yet set | US DOL OUI, FUTA Credit Reductions (opens in a new tab) |
Checked on October 5, 2026.
Income tax withholding
Checked on October 5, 2026.
Minimum wage
| Item | Value | Effective | Source |
|---|---|---|---|
| Minimum wage | $7.25 | US DOL WHD, Minimum Wage (opens in a new tab) | |
| Rises with inflation | No | US DOL WHD, State Minimum Wage Laws (updated July 1, 2026) (opens in a new tab) | |
| Local rates | Cities and counties may not set their own minimum wage or leave mandates (Code of Ala. §25-7-41(b)). | Code of Alabama 1975, §25-7-41 (opens in a new tab) |
Checked on October 5, 2026.
Paid family and medical leave
| Item | Value | Effective | Source |
|---|---|---|---|
| State program | None | Code of Alabama 1975, §25-7-41 (opens in a new tab) |
Checked on October 5, 2026.
Workers' compensation
| Item | Value | Effective | Source |
|---|---|---|---|
| Required | From 5 employeesRegularly employs five or more in any one business; full- and part-time count, including corporate officersConstruction: from the first employee, for employers building, or assisting on site with, new single-family detached homes | Code of Alabama 1975, §25-5-50 (opens in a new tab) | |
| State fund | None; private insurers | Code of Alabama 1975, §25-5-50 (opens in a new tab) |
Checked on October 5, 2026.
What a paycheck costs the employer in Alabama
Employer taxes and contributions on one employee's pay in Alabama, per check and for the year, at the rates a new employer pays. State rates are the ones on this page; federal rates are the ones on the federal payroll tax rates page.
- Employer taxes and contributions per check
- $252.70
- First check of the year
- Cost per check
- $2,560.39
- Pay included, first check
- Cost per year
- $64,848.00
- Pay included
Later checks cost less once pay passes a wage base: the year's last check costs $2,484.23, pay included.
| Item | Rate | First check | Per year | Source |
|---|---|---|---|---|
| Social Security, employer share | 6.2% on the first $184,500 | $143.08 | $3,720.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Medicare, employer share | 1.45% of all pay | $33.46 | $870.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Federal unemployment (FUTA) | 0.6% on the first $7,000After the full 5.4% credit. Employers in a credit reduction state pay more. | $13.85None after check 4 | $42.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Alabama unemployment | 2.7% on the first $8,0002.70% of the first $8,000 of each employee's wages until the employer qualifies for an experience rate | $62.31None after check 4 | $216.00 | Code of Alabama 1975, §25-4-51 (opens in a new tab); Alabama Department of Workforce, Employers FAQ (opens in a new tab) |
| Employer taxes and contributions | $252.70 | $4,848.00 | ||
| Pay | $2,307.69 | $60,000.00 | ||
| Pay plus employer costs | $2,560.39 | $64,848.00 |
Checked on October 5, 2026. Shows one employee's pay for a full calendar year, every check at the rates in force on October 13, 2026, with all pay subject to these taxes, the new employer rates and the full employer shares the law sets. An employer may choose to pay an employee's share too. Benefits and other costs are not included.
Common questions
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Payroll taxes calculated, deposited and filed in every state
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Rates in other states
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Sources
The agency page or document behind each figure, as checked.
- Alabama Department of Workforce, Employers (opens in a new tab)
- Alabama Department of Workforce, Employers FAQ (opens in a new tab)
- Code of Alabama 1975, §25-4-16 (opens in a new tab)
- Code of Alabama 1975, §25-4-51 (opens in a new tab)
- US DOL OUI, FUTA Credit Reductions (opens in a new tab)
- Alabama Department of Revenue, Withholding Tax (opens in a new tab)
- Alabama Department of Revenue, Withholding Tax Tables and Instructions for Employers, revised January 2026 (PDF) (opens in a new tab)
- Alabama Department of Revenue, Form A-4 (rev. 04/25) (PDF) (opens in a new tab)
- US DOL WHD, Minimum Wage (opens in a new tab)
- US DOL WHD, State Minimum Wage Laws (updated July 1, 2026) (opens in a new tab)
- Code of Alabama 1975, §25-7-41 (opens in a new tab)
- Code of Alabama 1975, §25-5-50 (opens in a new tab)
- IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab)
General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes.