Alabama Paycheck Calculator 2026

How Alabama withholding is calculated

Alabama employers who compute withholding by software use the Department of Revenue's formula, which annualizes pay, subtracts four items and taxes the rest at 2%, 4% and 5%^[al1]. The four subtractions are what make Alabama unusual:

1. Standard deduction, set by your A4 claim and phased down as annual pay rises (table below).
2. Federal income tax withheld, multiplied by the number of pay periods. On this page's $60,000 example that is $5,020 a year.
3. Personal exemption: $0 for "0", $1,500 for "S" or "MS", $3,000 for "M" or "H".
4. Dependents: $1,000 each when annual gross income is $50,000 or less, $500 each up to $100,000, and $300 each above that.

The remainder is taxed at 2% on the first $500, 4% on the next $2,500 and 5% above $3,000. For an "M" claim the bands double: 2% on the first $1,000, 4% on the next $5,000, 5% above $6,000. ADOR's own example, an "M-2" employee paid $850 weekly, comes to $1,538.50 a year, or $29.59 a week^[al1].

Alabama Form A4: exemptions and dependents

Form A4 is Alabama's own withholding certificate; the federal W-4 is not accepted in its place, and an employer with no A4 on file withholds using zero exemptions^[al1]. The 2025 revision of the form, reprinted in the 2026 booklet, has five lines for the employee:

• Line 1, "0". No personal exemption, the highest withholding.
• Line 2, "S" or "MS". $1,500 for a single person or a married person filing separately.
• Line 3, "M" or "H". $3,000 for a married couple (the spouse then claims "0") or for a single head of family with qualifying dependents.
• Line 4. Dependents other than your spouse for whom you provide more than half of the support.
• Line 5. Any additional amount per pay period.

Claims of eight or more dependents are referred to ADOR for verification, and the form warns of a $500 penalty for inflating exemptions. In the calculator a married "M" claim with two dependents lowers Alabama tax on $60,000 from $2,509 to $2,328 a year. The married federal W-4 also lowers federal withholding, which shrinks the federal-tax subtraction and offsets part of that saving.

Pre-tax benefits are excluded before any of this: the booklet lists section 125 cafeteria plans, 401(k), 403(b), 457 and SEP or SIMPLE deferrals as amounts that are not wages for Alabama withholding. Bonuses can instead be withheld at a flat 5%.

Alabama occupational tax: Birmingham and other cities

Some Alabama cities levy their own occupational tax on wages earned inside city limits, and the employer withholds it alongside state tax. The Department of Revenue does not administer these taxes; each city does^[al1]. Three city pages state a 1% rate:

• Birmingham: 1% of employee pay, remitted by the 20th of the following month; the city's own example applies 1% to $7,500 of monthly wages^[al2].
• Auburn: a 1% occupation license fee on gross wages earned within the city, usually withheld by the employer and paid quarterly^[al3].
• Leeds: 1% of gross compensation, with nothing deducted before the tax is figured, owed by anyone employed in the city, residents or not^[al4].

Choosing Birmingham in the calculator adds $23.08 per paycheck on $60,000, or $600 a year, applied to gross pay. Other cities levy similar taxes at different rates; check with the city where you work, since this calculator only lists rates confirmed on a city's own site.

Working in Alabama from another state

A 30-day safe harbor created by Act 2025-334 exempts nonresidents who work in Alabama for 30 or fewer days in a calendar year; from day 31 their Alabama earnings are taxable and subject to withholding^[al1].

Alabama take-home pay on common salaries

Worked example: $60,000 in Alabama

1. Gross pay: $60,000 a year ÷ 26 paychecks = $2,307.69.
2. Federal income tax: the IRS percentage method annualizes $60,000 of taxable wages, subtracts the $8,600 built into the 2026 tables for a standard W-4, and applies the brackets (top rate 12%): $193.08^[p15t].
3. FICA: 6.2% Social Security $143.08 plus 1.45% Medicare $33.46^[tc751].
4. Alabama: Alabama income tax $96.50.
5. Net pay: $1,841.58 per paycheck, $47,881 a year (79.8% of gross).

Compare Alabama with nearby states

Same $60,000 salary, different state: Georgia $1,851.71 · Tennessee $1,938.08 · Florida $1,938.08 per paycheck. The state tax calculator ranks every state we cover on one salary, and the paycheck calculator switches states in one click. Hourly? Add overtime with the time and a half calculator.