Read on to learn more. Fax Number: 205- 254-2963. In-depth review of the spectrum of Alabama employment law requirements HR must follow with respect to withholding taxes. The first step towards understanding Alabama’s tax code is knowing the basics. Reciprocal tax agreements allow residents of one state to work in other states without having taxes for that state withheld from their pay. We apologize for the inconvenience. Working Hours. Author: Vicki M. Lambert, The Payroll Advisor. New employers generally have an initial rate of 2.7%. Withholding Formula >(Alabama Effective 2020)< Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages. This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. My Alabama Taxes My Alabama Taxes is currently unavailable. Please try again later. We are here to help!This is not an all-inclusive list for new employers. Some employment types are exempt from Alabama withholding tax. Federal law and guidance on this subject should be reviewed together with this section.. If you are a new employer in Alabama, you will need to register your business with the Alabama Department of Revenue and Alabama Department of Labor. Harbor Compliance provides payroll tax registration services in every state to help your company hire employees and process payroll on time. Alabama Payroll Taxes and Withholding Information: Employer Registration — Alabama employers must register with the Alabama Department of Revenue and the Alabama Department of Labor . Instead you fill … My Alabama Taxes My Alabama Taxes is currently unavailable. The tax rate ranges from 2% to 5%. Alabama Payroll Taxes Payroll Tax Rates. You can find Alabama’s tax rates here. If you are an existing employer who has previously run payroll in the Alabama, you likely already have the IDs and online accounts needed for OnPay to process your tax filings. You will need to register with your local government if you do business in any of these localities: Attalla, Auburn, Bear Creek, Beaverton, Bessemer, Birmingham, Brilliant, Fairfield, Gadsden, Glencoe, Goodwater, Guin, Haleyville, Hamilton, Leeds, Lynn, Macon County, Midfield, Mosses, Opelika, Rainbow City, Red Bay, Shorter, Southside, Sulligent, Tarrant, and Tuskegee. Below is a state-by-state map showing tax rates, including supplemental taxes and workers’ compensation. Alabama new employers need to register with the Department of Revenue for a withholding tax account number for state income taxes (SIT). TAX FORMS. Each state’s tax code is a multifaceted system with many moving parts, and Alabama is no exception. Alabama uses the Internal Revenue Service's (IRS's) Common Law Test to determine who is an employee for employment tax purposes. Alabama does not have a state minimum wage rate. Payroll taxes aren’t the only thing to exclude from employees’ paychecks. You can simply provide your employer with a required document If you work in a state that has reciprocity with your home state. Alabama Payroll Taxes 11 Steps to Compliance in the Dixie State. Once you set up company and employee, ezPaycheck will calculate Alabama income tax for you automatically. Let us know if you have any questions. Alabama Tax Account Numbers Alabama Payroll Tax Details To sign up for Square’s online payroll services in Alabama, you must be registered with the Alabama Department of Revenue and the Alabama Department of Labor so we can pay and file your state taxes. It does not matter which state your employees live in. Explore our full range of payroll and HR services, products, integrations and apps for businesses of all sizes and industries. Free Federal, Alabama and Local Paycheck Withholding Calculator. Unlike most other states, Alabama does not require employers to pay withholding taxes on a regular schedule, such as monthly or quarterly, for an entire calendar year. Copyright © 2001-2020. We apologize for the inconvenience. withholding taxes) in addition to Federal payroll taxes. Enter your financial details to calculate your taxes Employee Withholding Allowance Certificate — New employees should complete the Alabama Withholding Exemption Certificate . Thanks! In addition, any single withholding tax payment of $750 or more must be filed electronically. From Alabama to Wyoming, we’ve got you covered. Alabama defines wages for state unemployment insurance (SUI) tax purposes as every form of compensation paid for personal services. The penalty for late filing of an Alabama withholding tax return is 10% of the tax due or $50.00, whichever is greater. Want to learn more about this topic? The penalty for late payment of withholding tax is 10% of the payroll taxes due. In addition to payroll penalties, you will be charged interest. To learn more about applying for an EIN, read our help article, Although it is not required, we recommend you enroll in the Electronic Federal Tax Payment System (EFTPS). We understand how busy you are. The .45 percent Jefferson County occupational license tax was declared unconstitutional by the Alabama Circuit Court in December 2010. Payroll Cycle . Main Agency Responsible for Alabama Payroll Taxes, Alabama Department of RevenueIndividual & Corporate Tax DivisionWithholding Tax SectionGordon Persons Building, Room 432650 North Ripley St.Montgomery, AL 36104www.revenue.alabama.gov, Physical Addresses for Alabama Tax Service Centers, AUBURN/OPELIKA Service Center3300 Skyway DriveAuburn, AL 36830Phone -- (334) 887-9549, JEFFERSON/SHELBY Service Center2020 Valleydale Road, Suite 208Hoover, AL 35244Phone -- (205) 733-2740, DOTHAN Service Center344 North Oates St.Dothan, AL 36303Phone -- (334) 793-5803, GADSDEN Service Center235 College StreetGadsden, AL 35901Phone -- (256) 547-0554, HUNTSVILLE Service Center994 Explorer BoulevardHuntsville, AL 35807Phone -- (256) 922-1082, MOBILE Service Center955 Downtowner BlvdMobile, AL 36609Phone -- (251) 344-4737, MONTGOMERY Service Center1021 Madison AvenueMontgomery, AL 36104Phone -- (334) 242-2677, MUSCLE SHOALS Service Center874 Reservation RoadMuscle Shoals, AL 35662Phone -- (256) 383-4631, TUSCALOOSA Service Center518 19th AvenueTuscaloosa, AL 35401Phone -- (205) 759-2571, Mailing Addresses for Alabama Tax Service Centers, AUBURN/OPELIKA Service CenterPO Box 2929Auburn, AL 36831- 2929, JEFFERSON/SHELBY Service CenterP.O. Calculate your Alabama net pay or take home pay by entering your pay information, W4, and Alabama state W4 information. Alabama has many local income taxes. Deduct any pre-tax withholdings. The definitions of “employers” and “employees” under Alabama's law are the same as for federal tax purposes, and changes to the federal Internal Revenue Code are automatically adopted. Below, we have highlighted a number of tax rates, ranks, and measures detailing Alabama’s income tax, business tax, sales tax, and property tax systems. Payroll cycle in Alabama can be monthly or semi-monthly. 2021 W-4 Help for Sections 2, 3 and 4 (Latest W-4 has a filing status line, but no allowance line. Alabama State has personal income tax (a.k.a. If you're unsure of your Taxes in Alabama. Calculating Employer Payroll Taxes In addition to the taxes you withhold from an employee’s pay, you as the employer are responsible for paying certain payroll taxes as well: FICA Matching: You are required to match the employee’s FICA tax withholding, which means your company will pay 6.2% tax for Social Security and 1.45% tax for Medicare. Free Federal, Alabama and Local Paycheck Withholding Calculator. Some pre-tax deductions reduce only wages subject to federal income tax, while other deductions reduce wages subject to Social Security and Medicare taxes, as well. Alabama follows the federal minimum wage rate of $7.25 per hour. You can click on any city or county for more details, including the nonresident income tax rate and tax … Processing payroll in Alabama? 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