Alabama Payroll Calculator

Calculate employer payroll taxes, employee withholdings, and net pay in Alabama. Stay compliant with Alabama labor laws and tax regulations.

Why calculating business in Alabama is different

Alabama has a progressive income tax system with relatively low property taxes but moderate sales tax rates across counties.

State Income Tax
2% - 5%
Base Sales Tax
4%
State Min Wage
$7.25 / hr
Abbreviation
AL

Alabama Business Interactive Tool

This calculator uses the latest 2026 data for Alabama, including the minimum wage of $7.25 and the specific state income tax rates (2% - 5%).

Frequently Asked Questions about Alabama Business

How do I calculate payroll taxes in Alabama?

To calculate payroll taxes in Alabama, you must account for federal FICA taxes (Social Security and Medicare), federal unemployment (FUTA), Alabama state unemployment (SUTA), and Alabama state income tax withholding (2% - 5%).

What is the minimum wage for payroll in Alabama?

The current minimum wage in Alabama is $7.25 per hour. Employers must ensure all non-exempt employees earn at least this amount.