Alabama Salary Paycheck Calculator

Alabama payroll taxes

Typical paycheck withholdings in Alabama include:

• Federal income tax - based on IRS tax brackets and your Form W-4 choices.
• FICA - Social Security and Medicare (see details below).
• Alabama state income tax withholding - calculated using Alabama’s employer withholding tables and your AL-W4 data.
• State unemployment insurance (SUI) - employer-paid on the first portion of wages (employees do not pay SUI in Alabama).
• Local occupational tax - only in certain cities; employers withhold a small % of wages when applicable.
• Pre-tax deductions - e.g., traditional 401(k), HSA, Section 125 plans reduce taxable wages where eligible.
• Post-tax deductions - e.g., Roth 401(k), wage garnishments, after-tax benefits.

How Your Alabama Paycheck Works

1. Start with gross pay - salary per pay period or hourly rate × hours (include overtime where due).
2. Subtract pre-tax items - retirement, HSA/FSA, cafeteria plans.
3. Compute FICA - Social Security up to the annual wage base, Medicare on all wages (plus Additional Medicare for high earners).
4. Calculate federal withholding - using IRS methods and your W-4.
5. Calculate Alabama withholding - using Alabama’s state tables and AL-W4 elections.
6. Apply local occupational tax (if your work city requires it).
7. Subtract post-tax deductions - to arrive at net pay.

Your employer separately pays Alabama SUI on your covered wages; it doesn’t reduce your net pay but affects employer cost.

Alabama income unemployment tax rate - 10 years (employer SUI)

Employees do not pay Alabama SUI. Alabama employers generally pay on a taxable wage base of $8,000 per employee. Experienced-employer rates vary by schedule; new employers usually start at a standard rate.

* Ranges reflect commonly published schedules for experienced employers; Alabama’s official schedule may shift within an approximate band by year.

Alabama salary threshold

Alabama follows the federal Fair Labor Standards Act (FLSA) for white-collar overtime exemptions. The salary threshold for most executive, administrative, and professional exemptions is:

• $43,888 per year effective July 1, 2024.
• $58,656 per year effective January 1, 2025.

Employees paid below these levels (and not otherwise exempt) must receive overtime pay for hours worked over 40 in a workweek.

Median Household Income - 10 Years (Alabama)

The table below shows nominal (current-dollar) median household income for Alabama (annual), useful for context when reviewing paychecks and cost-of-living trends.

Note: Different sources also publish inflation-adjusted (real) medians; 2023 real estimate is ≈$62.2K.

Alabama Federal Insurance Contributions Act (FICA)

• Social Security: 6.2% employee + 6.2% employer, applied up to the annual wage base.
• Medicare: 1.45% employee + 1.45% employer on all wages.
• Additional Medicare: Extra 0.9% employee-only on wages above $200,000 (single threshold; employer still 1.45%).

FICA is federal and applies the same way in Alabama as in other states.

Number of cities that have local income taxes (occupational tax)

In Alabama, about 25–26 municipalities levy an occupational (local income) tax that employers withhold from wages when work is performed within those cities. Rates typically range from 0.5% to 2%, with many at 1%. This tax is separate from Alabama’s state income tax and only applies where adopted by local ordinance.

Selected Alabama cities with occupational tax (examples)

Rates can change; always confirm with the city’s current ordinance or employer guidance.

Alabama Wage and Hour Laws: Overtime, Pay Frequency

• Minimum wage: Alabama has no separate state minimum; employers covered by FLSA must pay the federal minimum wage.
• Overtime: Alabama defers to FLSA - most non-exempt workers earn at least 1.5× regular rate for hours over 40 in a workweek.
• Pay frequency: Alabama has no statewide pay-frequency statute; employers set reasonable, consistent schedules (weekly/biweekly/semimonthly are common) and must pay on time under federal law.
• Temporary Alabama income-tax exemption on overtime: Alabama exempted certain overtime wages from state income tax through June 30, 2025 (employers still withhold federal taxes and FICA as normal).

Additional Alabama forms

• AL-W4 - Alabama Employee Withholding Exemption Certificate (state allowances/elections).
• Form A-1 - Employer’s Quarterly Return of Income Tax Withheld.
• Form A-6 - Employer’s Monthly Return of Income Tax Withheld.
• Alabama Withholding Tax Tables & Instructions - official employer withholding guidance.
• UC Employer Registration/Account - Alabama Department of Labor (for SUI account setup and rates).

FAQs - Alabama Salary Paycheck Calculator

How do I use an Alabama Salary Paycheck Calculator for accurate take-home pay?

Enter your gross pay (per period), pay frequency, filing status, dependents/allowances, and pre-tax/post-tax deductions. The calculator applies federal, Alabama, FICA, and any local occupational taxes to estimate your net paycheck.

Does Alabama have local income taxes that affect my paycheck?

Yes. Some Alabama cities impose an occupational tax (often 1%–2%). If your work location is in one of those cities, your employer must withhold it along with state and federal taxes.

What is the Alabama SUI taxable wage base and do employees pay it?

The SUI taxable wage base is $8,000 per employee per year. Only employers pay Alabama SUI; it is not deducted from employee paychecks.

What salary makes me exempt from overtime in Alabama?

Alabama follows federal FLSA rules. Most EAP exemptions require a salary of $58,656 or more from Jan 1, 2025 (previously $43,888 from Jul 1, 2024) plus duties tests. If you’re below the threshold or don’t meet duties tests, you’re generally overtime-eligible.

What are the current FICA rates taken from my Alabama paycheck?

FICA withholds 6.2% Social Security (to the annual wage cap) and 1.45% Medicare on all wages, plus an extra 0.9% Medicare surtax on wages over $200,000 (employee-only). Your employer matches the 6.2% and 1.45% portions.

Does Alabama tax overtime differently?

For state income tax purposes, overtime wages were temporarily exempt through June 30, 2025. After that, Alabama’s normal state income tax rules apply. Federal taxes and FICA always apply to overtime pay.

How do pre-tax benefits change my Alabama paycheck?

Pre-tax deductions (traditional 401(k), HSA/FSA, Section 125 premiums) reduce taxable wages for federal and state income taxes, and sometimes for FICA. This increases net pay compared with the same benefit taken after tax.

Why is my Alabama take-home different from a coworker with the same salary?

Withholding depends on filing status, dependents, W-4 details, pre-tax benefits, Roth vs. traditional contributions, local occupational taxes, and supplemental/bonus withholding rules. Two employees at the same gross pay can have different net pay.

What’s the recent trend in Alabama median household income?

Alabama’s median household income has risen over the last decade overall (with some year-to-year variation), reaching roughly the low-$60Ks by 2023 and higher in 2024 nominal dollars.

Where can I find Alabama employer withholding tables and forms?

See Alabama Department of Revenue’s employer withholding booklet and forms (A-1, A-6), and the AL-W4 for employee elections.

Is there a required pay frequency in Alabama?

Alabama law doesn’t mandate a specific frequency. Employers generally pay weekly, biweekly, or semimonthly on a consistent schedule, and must comply with federal wage-payment and recordkeeping requirements.

Do remote employees owe a city occupational tax?

Occupational tax rules depend on where work is performed (and sometimes employer location). If you work within a city that levies the tax, withholding usually applies. Check the local ordinance and employer policy.

How are bonuses and commissions taxed in Alabama paychecks?

They’re subject to federal withholding (often using IRS supplemental rates), FICA, Alabama state withholding, and any applicable local occupational tax. Your net depends on method (aggregate vs. flat-rate) and your year-to-date totals.