Employer's Obligations for Alabama State Payroll Taxes- Updated on Feb 15, 2023 - 11:00 AM by 123PayStubs Team
With 123PayStubs, you can know the tax liabilities for the pay period and generate pay stubs instantly for salaried or hourly employees and contractors in Alabama.
To create paystubs, enter a few basic details like company and employee information, earnings, and pay schedule information. That's it! Our Alabama paystub generator will do all the math for you and generate pay stubs with accurate tax calculations.
Also, 123PayStubs provides information about the payroll requirements for the state.
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What should employers know about the Alabama State Payroll Taxes?
123PayStubs will be suitable for those who are doing payroll on their own. As, 123PayStubs covers all the information required for Alabama state withholding taxes and provides you with the exact details to keep payroll under your control.
Apart from the federal withholding, employers in Alabama are also responsible for certain state payroll tax requirements which are listed below.
Alabama State Minimum Wage Requirements
Alabama does not have a state minimum wage rate.
Therefore employers must pay their employees the federal minimum wage rate of $7.25/hr. Though this rate applies to all occupations, tipped employees who receive $30 per month as tips, must be paid at least $2.13/hr.
Alabama State New Hire Reporting
All employers must report their newly hired and rehired employees to the Alabama Department of Labor within 7 days from their date of hire or reemployment.
If employers fail to report to the state agency, then they will be fined up to $25 for each violation.
Employers may send copies of Form W-4 to the New Hire Unit or may do it electronically.
Alabama state does not require the reporting of independent contractors.
Filing New Hire Report Form Online
Employers can report the new hire report forms online through the Alabama New-Hire Electronic Filing System. Use this method if there are more than five employees.
If there are less than 5 employees, employers may send copies of Form W-4 to the Department of Labor New Hire Unit.
Mailing New Hire Report Form
Mail the completed New Hire Report Form to the following address:
649 Monroe Street, Room 3205
Montgomery, AL 36131
Alabama State Withholding Tax
- The Alabama state requires employers to withhold state income taxes from employee's pay by filling out Form A4- Employee's Withholding Tax Exemption Certificate in addition to the Federal Form W-4.
- Alabama does not have any reciprocal agreements with other states of the U.S.
- Alabama State Tax Rates for Supplemental Wages is 5.0%
Alabama State Unemployment Insurance TAX (SUI)
- Alabama SUTA wage base limit for 2020: $8,000
- Alabama SUTA tax rates for 2020: 0.65 to 6.8%
- Alabama SUTA tax rates for new employers: 2.7%
Other Payroll Requirements for Alabama
Alabama Termination Pay: The state does not have any laws that mandate an employer to pay wages to their employees who quit their job, left work due to a dispute, are terminated, or laid off.
Remit withholding for child support to
P. O. Box 4960, Montgomery,
Alabama State Local Taxes
- There are no local taxes in the cities and counties of Alabama.
- However, municipal occupational taxes may exist for the below locations: Attalla, Auburn, Bear Creek, Beaverton, Bessemer, Birmingham, Brilliant, Fairfield, Gasdsen, Glencoe, Guin, Haleyville, Hamilton, Irondale, Leeds, Lynn, Macon (county), Midfield, Mosses, Opelika, Rainbow City, Red Bay, Shorter, Southside, Sulligent, Tarrant and Tuskegee.
When is the Alabama state payroll tax payment due?
Alabama state requires tax payments to be made on a quarterly, monthly, and annual basis.
- Form AL-A-1: Quarterly Withholding Return
- Form AL-A-6: Department of Revenue Monthly Return
- Form AL-A-3: Annual Reconciliation Income Tax Withholdings.
However, tax deposits for unemployment insurance fall due each quarter and must be filed to the Alabama Department of Labor.
Alabama State Deposit Requirement
The state of Alabama requires employers remitting payments of more than $750 to submit payments and returns electronically through the department's electronic filing system, My Alabama Taxes (MAT). Other employers (regardless of the payment amount) can file and pay taxes electronically.
Quarterly Tax Deposit Requirement
- Form A-1, a quarterly tax report form is required to be filed by all employers and withholding agents whether or not any tax is withheld.
- The due date for the quarterly form is the last day of the first month following the end of the quarters.
- The due dates fall on March 31, June 30, September 30, and December 31.
Monthly Tax Deposit Requirements
- A monthly Form A-6 is required for each of the following months, which has withholdings more than $1,000.
- The months are January, February, April, May, July, August, October, and November.
- The due date to submit the form A-6 is on the 15th day of the month immediately following the month in which more than $1,000 was withheld.
Quarterly Alabama Payroll Tax Filings
Employers can file the withholding returns using My Alabama Taxes (MAT). MAT can be accessed from the Alabama Department of Revenue website.
The unemployment insurance must be filed quarterly to the Alabama Department of Labour using the Alabama Department of Labor’s online application- eGov.
When is Form AL-A-1, AL-A-3, AL-A-6, and AL-UC-CR4 due?
- Form AL-A-3: Annual Reconciliation Income Tax Withholdings is due on the last day of January each year.
- Form AL-A-1: Quarterly Withholding Return is due on March 31, June 30, September 30, and December 31.
- Form AL-A-6: Department of Revenue Monthly Return is due on the 15th day of the month immediately following the month in which more than $1,000 was withheld.
- Form AL-UC-CR4: Quarterly Contribution Report is due on March 31, June 30, September 30, and December 31.
If the deadline falls on a weekend or any legal holiday, then the forms are due by the next business day.
Annual Alabama Payroll Tax Filings
The state of Alabama requires employers to issue wage and tax statements (Form W-2) to their employees by January 31. Also, copies of Form W-2, along with Form A-3, must also be submitted to the department by January 31st.
If employers are submitting more than 25 forms of W-2, they are required to file these with the department electronically. In the case of fewer than 25 forms, employers are encouraged to file their annual reconciliation electronically voluntarily.
123PayStubs is more than a paystub generator.
No matter which part of Alabama your business operates in, our Alabama paystub generator will let you create pay stubs for your employees and contractors with accurate tax calculations including all cities like Birmingham, Montgomery and Mobile. You only have to provide a few basic information such as company, employee and salary details and our pay stub generator will calculate all the applicable taxes swiftly based on the information provided. It will take less than 2 minutes to generate a pay stub. Employees and contractors in Alabama can use the pay stubs as proof of income.