Alabama employs a graduated income tax system with rates ranging from 2% to 5%, which can significantly impact your net income based on your earnings level. While not as complex as some other states, Alabama's tax code includes various deductions and exemptions that affect your paycheck.
Alabama Income Tax Highlights
- 2% on the first $500 of taxable income ($1,000 for married couples filing jointly)
- 4% on the next $2,500 ($5,000 for married couples filing jointly)
- 5% on all taxable income over $3,000 ($6,000 for married couples filing jointly)
These rates apply to residents on all sources of income and to non-residents on Alabama-sourced income. The state also allows for certain deductions, including a full deduction for federal income taxes paid, which can substantially affect your taxable income.
Alabama Calculators & Tools
Calculate Your Take-Home Pay
Input your income details and see how much you make after taxes and deductions.
Bonus Calculators
Find out how much your bonus will be taxed.
Net-to-Gross
Find out how much your gross pay should be for a specific take-home pay.
Withholding Forms
Specialty Calculators
Dual Scenario Hourly
Compare your take home pay in different hourly scenarios.
Dual Scenario Salary
Compare your take home pay in different salary scenarios.
401k Calculator
See how increasing your 401k contributions will affect your paycheck and your retirement savings.
Tax Tip Calculator
Determine your take home from tips after taxes
Learn more about the Payroll Process in Alabama
Visit the Alabama Payroll Guide page
Fun Facts
Known as the "Heart of Dixie," Alabama played a pivotal role in the Civil Rights Movement. It's home to the U.S. Space & Rocket Center and beautiful Gulf Coast beaches. The state also celebrates its rich Southern heritage through music and food.