Alabama paycheck taxes at a glance
| State income tax | 2% to 5% (3 brackets) |
|---|---|
| Standard deduction | $3,000 single, $8,500 joint, $5,200 head of household |
| Personal exemption | $1,500 single, $3,000 joint |
| Per dependent | $1,000 exemption |
| Pre-tax deductions | 401(k), HSA and health premiums lower state tax too |
| Local income tax | Yes: 4 options in the calculator |
| State payroll deductions | None |
| Reciprocity | None |
| Figures | Tax year 2026 |
Every paycheck also has federal income tax, Social Security (6.2% up to $184,500) and Medicare (1.45%), worked out with the same 2026 IRS figures as ourmain paycheck calculator.
Alabama income tax brackets
| Taxable income | Rate |
|---|---|
| $0 to $500 | 2% |
| $500 to $3,000 | 4% |
| Over $3,000 | 5% |
| Taxable income | Rate |
|---|---|
| $0 to $1,000 | 2% |
| $1,000 to $6,000 | 4% |
| Over $6,000 | 5% |
Alabama also has rules the brackets alone do not show (see the notes below); the calculator applies them.
Worked examples
A $55,000 salary in Birmingham, single, paid every two weeks
| Per paycheck | Per year | |
|---|---|---|
| Gross pay | $2,115.38 | $55,000 |
| Federal income tax | − $170.00 | − $4,420 |
| Social Security and Medicare | − $161.83 | − $4,208 |
| Alabama income tax | − $88.04 | − $2,289 |
| Local: Birmingham (1%) | − $21.15 | − $550 |
| Take-home pay | $1,674.37 | $43,534 |
Single, paid every two weeks (26 paychecks). Alabama taxable income is $46,580 and the state tax is $2,289, an effective 4.162% of gross pay. The standard deduction has already dropped to its $2,500 minimum at this income, but the federal tax deduction lowers Alabama taxable income. Birmingham’s 1% applies to the full gross salary.
A $120,000 household in Huntsville, married filing jointly with two children
| Per paycheck | Per year | |
|---|---|---|
| Gross pay | $4,615.38 | $120,000 |
| 401(k) at 6% | − $276.92 | − $7,200 |
| Federal income tax | − $183.69 | − $4,776 |
| Social Security and Medicare | − $353.08 | − $9,180 |
| Alabama income tax | − $188.12 | − $4,891 |
| Take-home pay | $3,613.57 | $93,953 |
Married filing jointly, 2 children, paid every two weeks (26 paychecks). Alabama taxable income is $99,424 and the state tax is $4,891, an effective 4.076% of gross pay. Above $100,000 of Alabama AGI each child is worth only a $300 exemption. Huntsville has no occupational tax, so there is no local line on the stub.
Deduction for federal income tax
Alabama subtracts the federal income tax you actually owe for the year before applying its own rates. The amount is your federal tax after nonrefundable credits such as the child tax credit, minus refundable credits like the earned income credit, as figured on the Form 40 worksheet. Because federal tax rises with income, this deduction softens Alabama’s flat-looking 5% top rate for middle and higher earners. This calculator deducts the federal income tax it computes for you.
A standard deduction and dependent exemption that shrink
- Standard deduction: $3,000 single, $8,500 joint, $5,200 head of family and $4,250 married separate at lower incomes. Above $25,999 of Alabama AGI ($12,999 separate) it drops step by step, reaching $2,500 single, $5,000 joint and $2,500 head of family at $35,500.
- Personal exemption: $1,500 single or separate, $3,000 joint or head of family.
- Each dependent: $1,000 up to $50,000 of AGI, $500 up to $100,000 and $300 above.
Occupational taxes in Birmingham, Gadsden and other cities
Some Alabama cities charge an occupational license tax on the wages of everyone who works inside city limits, including commuters. Birmingham takes 1% and Opelika 1%, while Gadsden takes 2%. The tax applies to gross wages with no deductions, and your employer withholds it. Living in the city does not matter: a Hoover resident working downtown pays Birmingham’s tax, while a Birmingham resident working in Hoover does not. A few other cities have similar levies; use the custom rate option for those.
No reciprocity, credits for other states
Alabama has no reciprocal agreements with neighbouring states. If you live in Alabama and work in Georgia or Mississippi, you pay that state on those wages and claim a credit on your Alabama return. If you work in Tennessee or Florida, there is no tax there, so Alabama taxes all of it.
Alabama vs. neighboring states
Take-home pay on a $75,000 salary, single, no pre-tax deductions and no local tax:
| State | Income tax | State tax + programs | Take-home |
|---|---|---|---|
| Alabama | 2% to 5% (3 brackets) | $3,127 | $58,466 |
| Mississippi | 4% above $10,000 (single) | $2,268 | $59,325 |
| Tennessee | None on wages | $0 | $61,593 |
| Georgia | Flat 4.99% | $2,994 | $58,599 |
| Florida | None on wages | $0 | $61,593 |
Where you work and where you live can both matter. See paycheck calculators for every state for the full comparison.