Alabama paycheck calculator
Alabama's income tax tops out at a modest rate, but it reaches that rate after only a few thousand dollars of taxable income, so nearly every full-time worker pays it on most of their pay. Alabama is also one of the few states that lets you deduct the federal income tax you pay, and several cities add an occupational tax on wages earned inside city limits.
Take-home per paycheck
$2,249
- Take-home per year
- $58,466
- Total taxes per year
- $16,534
- Effective tax rate
- 22%
- Marginal tax rate
- 34.6%
- Assumes Form A-4 status "S" with 0 dependents. Alabama subtracts your federal income tax withholding before figuring state tax.
Take-home per paycheck: $2,249 every 2 weeks
| Line | Every 2 weeks | Per year |
|---|---|---|
| Gross pay | $2,885 | $75,000 |
| Federal income tax | −$295 | −$7,670 |
| Social Security | −$179 | −$4,650 |
| Medicare | −$42 | −$1,088 |
| State income tax | −$120 | −$3,127 |
| Take-home pay | $2,249 | $58,466 |
- Take-home pay$58,46678%
- Federal income tax$7,67010%
- Social Security & Medicare$5,7388%
- State & local taxes$3,1274%
How Alabama taxes your paycheck
- Up to 5%
- Three brackets of 2%, 4% and 5%; the 5% rate starts at $3,000 of taxable income ($6,000 for joint filers), and federal income tax is deductible.
- None
- Alabama has no state payroll tax withheld from employees.
- 4 included
- Alabama has no local income tax on residents, but several cities charge an occupational license fee on wages earned for work inside city limits, withheld by employers. Major examples are Birmingham, Auburn and Opelika (1%) and Gadsden (2%). It is based on where you work, not where you live.
- 5%
- Employers may withhold Alabama tax from bonuses and other supplemental pay at a flat 5%.
Alabama income tax rates for 2026
These are the return rates. Your employer withholds using Alabama's withholding method (Formula for computing Alabama withholding tax (ADOR booklet, rev. January 2026)), which the calculator above follows.
| Taxable income | Rate |
|---|---|
| $0 – $500 | 2% |
| $500 – $3,000 | 4% |
| Over $3,000 | 5% |
| Taxable income | Rate |
|---|---|
| $0 – $1,000 | 2% |
| $1,000 – $6,000 | 4% |
| Over $6,000 | 5% |
| Item | Amount |
|---|---|
| Standard deduction — Single (Phases down to $2,500 between $26,000 and $35,500 of income.) | $3,000 |
| Standard deduction — Married filing jointly (Phases down to $5,000 between $26,000 and $35,500 of income.) | $8,500 |
| Standard deduction — Head of household (Head of family; phases down to $2,500 between $26,000 and $35,500.) | $5,200 |
| Standard deduction — Married filing separately (Phases down to $2,500 between $13,000 and $17,750 of income.) | $4,250 |
| Personal exemption — single or married filing separately | $1,500 |
| Personal exemption — married filing jointly or head of family | $3,000 |
| Dependent exemption (income up to $50,000) — $500 for income over $50,000 up to $100,000; $300 above $100,000. | $1,000 |
Other taxes on Alabama paychecks
| Locality | Type | Resident rate |
|---|---|---|
| Birmingham | city | 1% |
| Auburn | city | 1% |
| Opelika | city | 1% |
| Gadsden | city | 2% |
$45,670 in Alabama
$45,670 is the median annual wage in Alabama (May 2025, BLS OEWS). A single filer paid every two weeks with no other income or deductions takes home $36,997 a year, or $1,423 per paycheck.
| Line | Every 2 weeks | Per year |
|---|---|---|
| Gross pay | $1,757 | $45,670 |
| Federal income tax | -$127 | -$3,300 |
| Social Security | -$109 | -$2,832 |
| Medicare | -$25 | -$662 |
| State income tax | -$72 | -$1,878 |
| Take-home pay | $1,423 | $36,997 |
How Alabama withholding is calculated
Employers use the Department of Revenue's wage tables or its withholding formula. The formula annualizes your pay and subtracts four things: a standard deduction that depends on your Form A-4 status and shrinks as income rises, your annualized federal income tax withholding, your personal exemption, and an amount for each dependent. The rest is taxed at 2%, 4% and 5%, and the result is divided by your number of paydays.
Because federal withholding is subtracted, anything that raises your federal withholding, such as fewer federal credits, slightly lowers your Alabama withholding.
On Form A-4 you claim S (single), M (married, claiming both spouses), H (head of family with dependents) or MS (married filing separately), plus the number of dependents. If you do not turn in an A-4, your employer must withhold as if you claimed zero exemptions, and the federal W-4 cannot be used in its place.
City occupational taxes
Alabama has no local income tax on residents, but a number of cities charge an occupational license fee on wages earned for work done inside city limits. Employers withhold it from each paycheck along with state tax.
Birmingham, Auburn and Opelika charge 1% of gross wages, and Gadsden charges 2%. Opelika cut its rate from 1.5% to 1% on April 1, 2025. The fee follows where you work, so someone who lives in Hoover but works in downtown Birmingham pays Birmingham's fee.
Pre-tax deductions
The Department of Revenue recognizes the federal exclusions for cafeteria plans (Section 125), 401(k), 403(b) and 457 plans, so those contributions are not Alabama wages and are not subject to state withholding. City occupational fees are generally figured on gross wages, which means pre-tax 401(k) deferrals can still be subject to the city fee.
Bonuses and other pay
Employers may withhold Alabama tax from bonuses and other supplemental wages at a flat 5%, the same as the top income tax rate.
Alabama has no state disability or paid family leave deduction for employees.
What changed recently
- 2025: Act 2025-334 created a 30-day safe harbor: out-of-state workers who perform services in Alabama for 30 or fewer days in a calendar year are not subject to Alabama tax on those earnings. Source
- 2025: Opelika reduced its occupational license fee from 1.5% to 1% of gross wages effective April 1, 2025. Source
Questions people ask
What are Alabama's income tax rates for 2026?
2%, 4% and 5%. Single filers pay 2% on the first $500 of taxable income, 4% on the next $2,500 and 5% above $3,000. Married couples filing jointly have brackets twice as wide: 2% on the first $1,000, 4% on the next $5,000 and 5% above $6,000.
Does Alabama let you deduct federal income tax?
Yes. Alabama allows a deduction for federal income tax, and the withholding formula subtracts your annualized federal withholding before figuring state tax.
What is the Birmingham occupational tax?
Birmingham charges an occupational tax of 1% on wages earned for work performed in the city. Your employer withholds it from each paycheck and pays it to the City of Birmingham.
Which Alabama cities have an occupational tax?
Several, including Birmingham (1%), Auburn (1%), Opelika (1%) and Gadsden (2%). The tax applies where you work, not where you live, and is usually figured on gross wages.
How are bonuses taxed in Alabama?
Employers may withhold a flat 5% of Alabama tax from bonuses and other supplemental wages. City occupational fees also apply to bonuses paid for work in those cities.
What should I put on Alabama Form A-4?
Write S if single, M if married and claiming both yourself and your spouse, H if you are single and qualify as head of family, or MS if married filing separately, then list your dependents. A married couple where both work should not both claim M; one spouse claims M and the other claims 0.
Sources
- Withholding Tax Tables and Instructions for Employers and Withholding Agents (revised January 2026) · retrieved 2026-10-16
- Form A-4 Employee's Withholding Tax Exemption Certificate (Rev. 4/2025) · retrieved 2026-10-16
- How to Become a Vendor for the Magic City Classic (occupational tax example) · retrieved 2026-10-16
- Tax and License Division · retrieved 2026-10-16
- Occupational License Fee · retrieved 2026-10-16
- Occupation License · retrieved 2026-10-16
- Occupation License Fee quarterly return form (rate reduced to 1% as of April 1, 2025) · retrieved 2026-10-16
- Business registration form (occupation tax note) · retrieved 2026-10-16
- City Council minutes, February 28, 2023 (resolution on the 2% Occupational License Fee) · retrieved 2026-10-16
- Publication 15-T (2026), Federal Income Tax Withholding Methods · retrieved 2026-10-16
- Publication 15 (2026), (Circular E), Employer's Tax Guide · retrieved 2026-10-16
- Rev. Proc. 2025-32: 2026 inflation-adjusted tax items · retrieved 2026-10-16
- Form W-4 (2026), Employee's Withholding Certificate · retrieved 2026-10-16
- Publication 505 (2026), Tax Withholding and Estimated Tax · retrieved 2026-10-16
- Form 1040-ES (2026), Estimated Tax for Individuals · retrieved 2026-10-16
- Schedule 1-A (Form 1040) 2026, Additional Deductions (early-release draft) · retrieved 2026-10-16
- Schedule 8812 (Form 1040) 2026, Credits for Qualifying Children and Other Dependents (early-release draft) · retrieved 2026-10-16
- Working Families Tax Cuts: Individuals and workers (tips, overtime, seniors, car loan interest) · retrieved 2026-10-16
- Working Families Tax Cuts provisions (charitable deduction for non-itemizers, Section 70424) · retrieved 2026-10-16
- Child Tax Credit · retrieved 2026-10-16
- IR-2025-111: 401(k) limit increases to $24,500 for 2026 · retrieved 2026-10-16
- Rev. Proc. 2025-19: 2026 HSA limits · retrieved 2026-10-16
- BLS Occupational Employment and Wage Statistics (OEWS), May 2025, median annual wage by state · retrieved 2026-10-16