Free Alabama payroll tax
calculator (and AL tax rates)

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  • 1

    Pay Details

  • 2

    Exemptions

  • 3

    Federal Information

  • 4

    State Information

  • 5

    Locale Information

  • 6

    Voluntary Deductions

  • 7

    Calculate Paycheck

Welcome to our payroll calculator!

Before we jump in, who are you using this calculator for?

Thanks!

Our calculators are designed for employers, and they’ll ask for information you may not have. For a better experience, please check out this employee-focused paycheck calculator.

How much did your employee earn?

Gross Pay: This is the total amount of wages your employee earned before taxes and deductions are withheld.


For salaried employees, gross pay equals their annual salary divided by the number of pay periods per year. For hourly employees, gross pay equals the number of hours worked multiplied by their hourly wage.


(Don’t forget to add on any tips, commissions, or bonuses!)

Gross Pay Method: Is the gross pay amount based on your employee’s annual compensation, or by how many hours they worked in the last pay period?

Gross Pay YTD: Enter the total gross pay your employee has earned this year, prior to this paycheck. Normally, this can be found on the last pay stub.

Pay Frequency: How often do you normally issue paychecks?

Check Date: Enter the check date that should appear on your paycheck.

Is your employee exempt from any taxes?

Federal: In some cases, public and governmental employees are exempt from federal taxes. Check “yes” if your employee is exempt and Federal taxes should not be deducted.

FICA: In some cases, public and governmental employees are exempt from FICA. Check “yes” if your employee is exempt and FICA taxes should not be deducted.

Medicare: In some cases, public and governmental employees are exempt from Medicare taxes. Check “yes” if your employee is exempt and Medicare taxes should not be deducted.

Please enter your employee’s withholding information.

2020 W4: Would you like to use the 2020 withholding tables? Here’s an article that covers the 2020 W-4 updates if you aren’t sure.

Federal Filing Status: Select your employee’s filing status for federal withholding. This helps determine how much federal tax will be withheld.

Two Jobs: If the employee indicated that they have more than one job or are married and filing jointly with a working spouse, select Yes here.

Dependents Amount: Enter the amount your employee listed on Line 3 of their W-4, if any. This is where they claim dependents.

Other Income: If your employee listed another other income on line 4(a) of their W-4, enter the amount here.

Deductions: Enter any deductions that your employee listed on line 4(b) of their W-4, if applicable.

Additional Federal Withholding: If your employee has asked to have additional funds withheld from each paycheck, enter the amount here. If they have not, enter “0”.

Round Federal Withholding: Would you like us to round your employee’s withholding totals to the nearest dollar? (It’s not required, but it is permitted)

Now, add information for their state.

State: Select the state where withholding should be calculated. It should be the same state where the work was performed.

Now, add locale information if applicable.

Does your employee have any voluntary deductions?

Please add any additional deductions for items like health insurance, 401(k), HSAs/FSAs, or any other benefits.


Select type of deduction needed:

401(k)

Add deduction

HSA

Add deduction

Custom

Add deduction

Let’s finish crunching the numbers!

Click the button below to see your paycheck calculated.

Here’s your paycheck information:

Leave payroll to us.

We do all the hard work to set you up, starting at just $40 + $6 per employee.

Updated: June 21, 2024

The payroll tax calculator at the top of this page is all you need to get payroll taxes right in Alabama. Just enter income and W-4 information for each employee, and the calculator will take care of the rest.

Federal payroll taxes

First and foremost, we have to give Uncle Sam his due. We’ll go through a quick overview of what you need to know when it comes to calculating federal payroll taxes. If you would like to see a more detailed explanation, we invite you to head on over to our comprehensive step-by-step guide.

  • Calculate Gross Wages:
    • For all your hourly employees, multiply their hours worked by the pay rate. Don’t forget to increase the rate for any overtime hours.
    • For all your salaried employees, divide each employee’s annual salary by the number of pay periods you have.
    • Don’t forget to add in other forms of compensation, such as commissions, tips, or bonuses, into gross wages.
  • Calculate Any Pre-Tax Withholdings: If your employees contribute to HSA, 401(k) or other pre-tax withholdings, deduct the appropriate amount from their gross pay before you calculate payroll taxes.
  • Deduct Federal Income Taxes: Federal taxes can range anywhere from 0% to 37% of taxable earnings. We won’t get into the nitty-gritty details here, but you can find further withholding information through the IRS website.
  • Deduct and match any FICA taxes:
    • Social Security tax, which is 6.2% of each employee’s taxable wages up until they reach $168,600 for the year. Employers also have to pay a matching 6.2% tax up to the wage limit.
    • Medicare tax, which is 1.45% of each employee’s taxable wages up to $200,000 for the year. For any wages above $200,000, there is an Additional Medicare Tax of 0.9%, which brings the rate to 2.35%. Employers have to pay a matching 1.45% of Medicare tax, but only the employee is responsible for paying the 0.9% Additional Medicare Tax.
  • Calculate the FUTA Unemployment Tax, which is 6% of the first $7,000 of each employee’s taxable income. Note that if you pay state unemployment taxes in full and on time, you are eligible for a tax credit of up to 5.4%, which brings your effective FUTA tax rate to 0.6%. It’s a whopping 90% tax savings! Only employers are responsible for paying the FUTA tax, not employees.
  • Subtract Post-Tax Deductions, which can be anything from court-ordered wage garnishments to child support. Most of your employees won’t have post-tax deductions, but you still need to look out for them.

Alabama payroll taxes

Now that we’re done with federal taxes, let’s talk about Alabama state taxes, shall we? The state has a progressive income tax, meaning the more money your employees make, the higher the income tax. The tax rate ranges from 2% to 5%.

 

In addition, depending on where in Alabama your employees live or work, certain cities also levy income taxes ranging from 0% to 2%.

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Alabama state unemployment insurance (SUI)

Alabama doesn’t have state disability insurance, but it does have unemployment insurance, which covers those unemployed through no fault of their own.

 

  • The wage base for 2024 is $8000 (the same as 2023) and rates range from 0.2% to 6.8%.
  • If you’re a new employer (congrats on your new venture!), you’ll pay a flat rate of 2.7%.
  • Remember, paying your SUI in full and on time qualifies you to get a huge FUTA tax credit, so make sure you pay attention to the due dates.

Most Alabama employers need to have a workers’ compensation policy. Learn more about how this type of coverage protects employees from workplace injuries and illnesses, as well as the requirements for employers, in our guide to Alabama workers’ compensation.

Alabama payroll tax resources

Just in case you want to learn even more about Alabama payroll taxes, here are a few helpful links.

 

Alabama Department of Labor: (800) 361-4524 | Register Your Business | Employer FAQ

 

Alabama Department of Revenue: (334) 242-1170 | Withholding Tax | Tax Due Dates

Time to write those paychecks!

You’re almost at the goal line! All that’s left to do after calculating your employee’s net pay is cut those checks. Just make sure you’re setting aside the amount your company needs to pay to avoid any FICA and UI tax fiascos. You will need to use Form 941 to file federal taxes quarterly, and Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. More details about employment tax due dates can be found here.

Other useful paycheck calculators

Employers in Alabama can use the straightforward calculator at the top of this page to calculate payroll (and necessary tax deductions). But occasionally, employers run into unique situations that call for a little more finesse with regard to paychecks. For instance, you may need to issue a final paycheck when an employee leaves for a different job. Or, if you reward employees with bonus pay — similar to regular wages — taxes must be withheld. So, if you need more help crunching the numbers, check out the additional calculators listed below.

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