Quick answer
Alabama paycheck basics
Alabama taxes wages at three graduated rates, 2%, 4% and 5%, and the top rate starts almost immediately: a single filer pays 5% on every dollar of taxable income above $3,000. What sets Alabama apart is that it lets you deduct the federal income tax you pay, so the state's withholding formula subtracts your annual federal withholding before it applies the rates. A few Alabama cities, including Birmingham, Gadsden and Opelika, also collect an occupational tax on wages earned inside city limits.
This calculator uses the Alabama Department of Revenue's own withholding formula with the exemption and dependents from your Form A-4. It figures your federal withholding first, feeds it into the Alabama formula, adds any city occupational tax you pick, and shows your take-home pay alongside Social Security and Medicare.
How Alabama taxes your paycheck
Alabama employers withhold with the Department of Revenue's formula. Your pay for the period is annualized, then four amounts come off: a standard deduction that depends on your A-4 exemption and shrinks as income rises ($3,000 for a single filer earning up to $25,999, falling to $2,500 at $35,500; $8,500 falling to $5,000 for a married couple), your annual federal income tax withholding, a personal exemption of $1,500 for single or married-filing-separately claims or $3,000 for married or head-of-family claims, and $1,000 per dependent ($500 above $50,000 of income, $300 above $100,000). The rest is taxed at 2% on the first $500, 4% on the next $2,500 and 5% above $3,000, or 2% on the first $1,000, 4% on the next $5,000 and 5% above $6,000 for married employees claiming M. The annual figure is divided by the number of paychecks. Bonuses may be withheld at a flat 5%. Traditional 401(k), 403(b) and 457 deferrals and cafeteria-plan benefits are excluded from Alabama wages.
| Taxable income | Rate |
|---|---|
| $0 – $500 | 2.00% |
| $500 – $3,000 | 4.00% |
| Over $3,000 | 5.00% |
| Taxable income | Rate |
|---|---|
| $0 – $1,000 | 2.00% |
| $1,000 – $6,000 | 4.00% |
| Over $6,000 | 5.00% |
Alabama local income taxes
Alabama has no county income tax, but about two dozen cities charge an occupational tax on wages earned within their limits, whether or not you live there. Your employer withholds it. Birmingham charges 1% of wages (its reconciliation form ties the tax to Medicare wages, so 401(k) deferrals are still taxed), Gadsden 2% of gross wages, Opelika 1.5% and Leeds 1% of gross compensation with no deductions. For another city, pick "Other city occupational tax" and enter its rate.
| Jurisdiction | Rate | Applies to | Source |
|---|---|---|---|
| Birmingham occupational tax | 1.000% | People who work here | Source |
| Gadsden occupational tax | 2.000% | People who work here | Source |
| Opelika occupational license fee | 1.500% | People who work here | Source |
| Leeds occupational tax | 1.000% | People who work here | Source |
Worked example
A $60,000 salary in Alabama, single, paid biweekly
- Annual salary:
- $60,000
- Filing status:
- Single
- Pay frequency:
- Biweekly (26 paychecks/year)
- Deductions:
- None
- State:
- Alabama
- Salary: +$2,307.69
- Federal income tax: −$193.08
- Social Security: −$143.08
- Medicare: −$33.46
- Alabama income tax: −$96.50
Net pay per paycheck: $1,841.57
Computed with Alabama's default withholding certificate (no allowances, no extra withholding) and no pre-tax or post-tax deductions. Your own paycheck will differ with different elections.
Take-home pay by salary in Alabama
Net pay at five common salaries, biweekly, with no bonus, tips or deductions — computed the same way as the worked example above, for Single and Married Filing Jointly.
| Annual salary | Single — per paycheck | Single — annual | MFJ — per paycheck | MFJ — annual |
|---|---|---|---|---|
| $40,000 | $1,257.35 | $32,691.10 | $1,324.58 | $34,439.08 |
| $60,000 | $1,841.57 | $47,880.82 | $1,921.23 | $49,951.98 |
| $80,000 | $2,376.47 | $61,788.22 | $2,505.45 | $65,141.70 |
| $100,000 | $2,887.63 | $75,078.38 | $3,089.69 | $80,331.94 |
| $150,000 | $4,144.91 | $107,767.66 | $4,488.16 | $116,692.16 |
How to use this calculator
- Enter your pay. Choose salary or hourly, fill in the amount and hours, and pick how often you are paid.
- Fill in your federal Form W-4. Filing status, the Step 2 checkbox, and Steps 3 and 4 if they apply to you.
- Fill in your A-4. The calculator only shows the fields Alabama actually asks for.
- Pick your local tax jurisdiction, if one applies to where you live or work.
- Add any deductions. Traditional or Roth 401(k), health premiums, HSA, FSA, or other pre-tax and post-tax amounts taken from your pay.
- Read your results. Net pay per paycheck, the full breakdown by category, and any warnings about your specific numbers.
Formulas used
Net pay = gross pay − pre-tax deductions − federal tax − FICA − Alabama income tax − state payroll programs − local tax − post-tax deductions.
Alabama vs. neighboring states
Net pay on a $75,000 salary, single, paid biweekly, in Alabama compared with its bordering states.
| State | Net pay per paycheck | Net pay annual | Difference vs. Alabama (annual) |
|---|---|---|---|
| Alabama | $2,248.69 | $58,465.94 | — |
| Tennessee | $2,368.94 | $61,592.44 | +$3,126.50 |
| Georgia | $2,253.79 | $58,598.54 | +$132.60 |
| Florida | $2,368.94 | $61,592.44 | +$3,126.50 |
Frequently asked questions
How is federal income tax withheld from my paycheck calculated?+
Employers use the IRS Publication 15-T percentage method with the elections on your Form W-4: filing status, whether Step 2 is checked, Step 3 credits, and any Step 4 adjustments. That produces an amount to withhold each pay period before Social Security, Medicare, and any state or local tax are applied.
What is FICA and why is it withheld on every paycheck?+
FICA is Social Security tax (6.2% of wages up to the annual Social Security wage base) plus Medicare tax (1.45% of all wages, with an extra 0.9% on wages above $200,000 in a year). Both are withheld on every US paycheck regardless of which state you work in, because they fund federal programs rather than a state one.
Is the result on this calculator the same as my actual paycheck?+
It is an estimate for planning, not a substitute for your pay stub. Your actual withholding depends on the exact elections on file with your employer, your specific pay dates, and any mid-year changes to your deductions — the calculator applies the published federal and state formulas to the numbers you enter.
What are the Alabama income tax rates for 2026?+
2% on the first $500 of taxable income, 4% on the next $2,500 and 5% on everything above $3,000 for single filers. 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.
Why does my federal withholding change my Alabama withholding?+
Alabama lets you deduct federal income tax on your state return, so the withholding formula subtracts your annualized federal withholding before applying the Alabama rates. If your federal withholding goes up, for example because you add extra withholding on your W-4, your Alabama withholding goes down a little.
How is Alabama withholding calculated on a $60,000 salary?+
For a single employee paid biweekly who claims S with no dependents, the $2,307.69 paycheck annualizes to $59,999.94. The formula subtracts the $2,500 standard deduction, about $5,020 of annual federal withholding and the $1,500 personal exemption, leaving about $50,980, which is taxed at $110 plus 5% of the amount over $3,000. That is about $2,509 a year, or $96.50 per paycheck.
Which exemption should I claim on Form A-4?+
Single employees claim S (or 0 to have more withheld). Married employees claim M to take both personal exemptions, in which case the spouse claims 0, or each spouse claims S. Married people filing separately claim MS, and single parents who qualify as head of family claim H. Dependents other than your spouse go on the separate dependents line.
How are bonuses taxed in Alabama?+
The Department of Revenue allows employers to withhold Alabama tax from bonuses and other supplemental wages at a flat 5%. Federal withholding on a bonus is usually the flat 22% supplemental rate.
Does Alabama tax 401(k) contributions?+
No. Alabama recognizes the federal exclusions for 401(k), 403(b), 457 and SIMPLE plans and for Section 125 cafeteria plans, so traditional contributions come out before Alabama withholding is figured. City occupational taxes are different: Birmingham and most other cities tax wages before 401(k) deferrals.
What is the Birmingham occupational tax?+
Birmingham charges 1% of the wages you earn working inside the city, whether you live there or not. Your employer withholds it from each paycheck and sends it to the city. Other cities with an occupational tax include Gadsden at 2%, Opelika at 1.5% and Leeds at 1%.
What if I never filled out an Alabama A-4?+
Your employer must withhold as if you claimed zero exemptions. The federal W-4 is not an acceptable substitute, so filing an A-4 with your correct exemption and dependents usually lowers your Alabama withholding.
What is the minimum wage in Alabama?+
Alabama has no state minimum wage law, so most employers must pay the federal minimum of $7.25 an hour under the Fair Labor Standards Act.
Sources
- Alabama Department of Revenue — Withholding Tax Tables and Instructions for Employers (revised January 2026)
- Alabama Department of Revenue — Withholding tax tables and Form A-4
- City of Birmingham — Form P.R.-2, Occupational Tax Withheld Reconciliation
- City of Gadsden — Business registration and occupational tax
- City of Opelika — Businesses With Employees
- City of Leeds — Occupational Tax
- U.S. Department of Labor — State Minimum Wage Laws
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods
- IRS Publication 15 (2026), Employer's Tax Guide
- Social Security Administration — 2026 COLA Fact Sheet