Alabama manages state payroll taxes through the Department of Revenue.
Alabama has a progressive income tax from 2% to 5%. Depending on where your employees live or work, some cities in Alabama also impose a levy on income taxes from 0% to 2%.
Alabama State Unemployment Insurance (SUI) varies by calendar year. 2021 rates range from 0.65% to 6.8%. New employers pay a flat rate of 2.7%.
Alabama does not offer state disability insurance.
Alabama employers must register with the Alabama Department of Revenue for state withholdings (payroll taxes) and the Alabama Department of Labor for unemployment taxes.