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Alabama Paycheck Guide

Alabama uses progressive tax brackets. Higher portions of pay are taxed at higher rates.

PI
Reviewed by PayslipIQ Editorial Team, in-house payroll editor
Last reviewed May 2026 · Editorial standards

In short

A Alabama paycheck has federal income tax, Social Security (6.2% up to the 2026 wage base of $184,500), and Medicare (1.45%), plus progressive Alabama state income tax, and local income tax in some cities. On a $65,000 single-filer salary, estimated Alabama take-home is about $50,833 a year, or $1,955 per biweekly paycheck.

PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, accounting, employment, benefits, or payroll advice. PayslipIQ is not a CPA firm, law firm, financial advisor, payroll provider, or tax authority. Always verify your paycheck, deductions, withholdings, and tax position with your employer's payroll department, a qualified CPA, the IRS, your state tax authority, or another appropriately qualified professional. Calculations are estimates; your actual paycheck may differ based on factors specific to your employer, location, benefits elections, and personal tax situation.

Alabama: the local picture

Alabama runs a graduated state income tax with a top rate of 5%. The bigger surprise on most Alabama paychecks is local. Several cities (Birmingham, Bessemer, Gadsden, Macon County, others) levy a city occupational tax that comes out of every paycheck for work inside the city limits, even if the worker lives elsewhere.

Alabama Paycheck Calculator

Estimate take-home pay for Alabama.

Alabama State Tax

Alabama tax structure and rates.

Alabama Overtime

Federal FLSA applies.

Alabama Pay Stub Laws

Employer pay stub requirements in Alabama.

Alabama take-home pay by salary (2026)

See estimated Alabama take-home for common salaries. Each page has a full federal, FICA, and Alabama breakdown with per-paycheck figures.

$40,000 after tax$50,000 after tax$60,000 after tax$75,000 after tax$90,000 after tax$100,000 after tax$125,000 after tax$150,000 after tax
All Alabama salariesAlabama gross-to-net calculator

How a Alabama paycheck is built

Every Alabama worker pays federal income tax, calculated on the W-4 you submitted to your employer using the IRS Publication 15-T tables. Federal income tax is followed by FICA: 6.2 percent Social Security up to the annual wage base, plus 1.45 percent Medicare on every dollar. The 0.9 percent Additional Medicare Tax applies once year-to-date wages cross $200,000 single or $250,000 married filing jointly.

Alabama adds progressive state income tax. The bracket you fall into depends on filing status and taxable income. Verify current brackets with the Alabama Department of Revenue.

Local taxes: Alabama has cities or counties that levy local income tax on top of state tax. Common examples are noted on the local-tax page.

What changed recently in Alabama

  • No major rate change for 2025-2026.
  • Overtime pay exempted from Alabama state income tax through 2025. Federal tax still applies.
  • Grocery sales tax cut from 4% to 3% in 2023, further reductions tied to revenue triggers.

Alabama payroll quirks workers should know

  • Birmingham occupational license fee: 1% of gross wages for work in Birmingham.
  • Auburn, Opelika, and several smaller cities run their own occupational tax.
  • Alabama exemption structure differs from federal W-4. Verify state withholding with payroll if it looks off.

Example breakdown

A hypothetical Alabama worker on a $65,000 annual salary, paid bi-weekly, single filer, no extra adjustments. Educational only, your real paycheck differs.

Gross (bi-weekly)$2,500.00
Federal income tax-$216.15
Social Security (6.2%)-$155.00
Medicare (1.45%)-$36.25
Alabama state tax-$137.50
Estimated take-home$1,955.10

Run your own numbers in the Alabama paycheck calculator.

Authoritative sources

Next steps

Want to go further?

The calculators and guides here are free. If you want a closer look at one specific stub, these optional next steps go deeper.

Premium pay stub report
A detailed one-off PDF that walks through every line on one stub, with a verify-with-payroll checklist.
Monthly paycheck monitor
Track each stub against the last one and get a plain-English alert when something shifts.
Talk to a CPA or EA
For anything that affects your taxes, find a credentialed professional through the IRS and state directories.

How PayslipIQ stays free: the tools and guides are free to use. PayslipIQ offers optional paid reports and monitoring, and links to independent CPA and tax-preparer directories. It is not affiliated with the IRS, the SSA, any employer, or any payroll provider, and does not sell user data. Educational only, not tax, legal, or financial advice.

Frequently asked questions

Does Alabama have state income tax?
Yes. Alabama uses progressive brackets. Verify with the Alabama Department of Revenue.
Are there local income taxes in Alabama?
Yes. Alabama has cities or counties that add local income tax on top of state tax. Check your specific city.
Does Alabama have State Disability Insurance or Paid Family Leave premiums?
No. Alabama does not have state-mandated SDI or PFL employee premiums.
Does Alabama have daily-overtime rules?
No. Alabama follows federal FLSA: 1.5x for hours above 40 in a workweek.
What is FICA on a Alabama paycheck?
FICA is federal: 6.2 percent Social Security up to the annual wage base, plus 1.45 percent Medicare on every dollar. The 0.9 percent Additional Medicare Tax applies above $200,000 single or $250,000 married filing jointly. FICA applies in every state.
Where do I verify Alabama state tax withholding?
The Alabama Department of Revenue (https://www.revenue.alabama.gov/) is the authoritative source. For your specific paycheck, contact your employer's payroll team or a CPA.
Why is overtime tax-free in Alabama?
Only state income tax is exempt. Federal tax, Social Security (6.2%), and Medicare (1.45%) still apply. The exemption was set to sunset in mid-2025 unless extended.
I live in Alabama and work remotely for an out-of-state employer. Who taxes me?
Alabama, on residence. You owe state income tax even if your employer is in a no-tax state. Set up Alabama state withholding through payroll to avoid a lump-sum bill at filing.
What is the city occupational tax line on my Birmingham paycheck?
The Birmingham occupational license fee. Currently 1% of gross wages for work performed in city limits. It applies to non-resident commuters as well.