Alabama Paystub Generator

Reading an Alabama pay stub, line by line

An Alabama pay stub has exactly one state line — and it is calculated in a way almost no other state uses: your employer subtracts your federal withholding before figuring the Alabama tax. Here is what each line means in 2026:

AL State Income Tax ("AL Withholding", "AL SIT", "State Tax – AL"). Alabama's rates are 2%, 4%, and 5% — but the 5% rate starts at just $3,001 of taxable income for a single filer (Code of Ala. § 40-18-5), the lowest top-bracket threshold of any state with brackets. The rates were fixed in 1935 and are not indexed, so practically every full-time paycheck is taxed at 5% on the margin. Before the rates apply, the withholding formula (ADOR Withholding Tax Tables & Instructions, rev. January 2026) subtracts your standard deduction, your federal income tax withholding, a $1,500 personal exemption (single), and $1,000 per dependent (falling to $500 above $50,000 of income and $300 above $100,000).

The federal-tax deduction that shrinks it. Alabama is one of a handful of states that let you deduct your federal income tax (Ala. Const. § 211.04; § 40-18-15(a)(3)). On the stub it works line by line: annualized federal withholding comes off before the 2/4/5% schedule is applied. At $60,000 that is the difference between about $2,509 and $2,760 of Alabama tax — calculators that skip the deduction overstate your Alabama tax by roughly 10%. One quirk: claiming more on your federal W-4 (lower federal withholding) slightly raises your Alabama withholding.

A standard deduction that shrinks as you earn more. Single filers get $3,000 at income up to $25,999, falling $25 for every $500 above that, to a $2,500 floor at $35,500 and up (§ 40-18-15(b); ADOR chart). Married filing jointly runs $8,500 down to $5,000; head of family $5,200 down to $2,500. The opposite direction from the federal $16,100.

Form A-4, not the W-4. Alabama withholding runs off its own Form A-4 (rev. April 2025) with codes "0" (no exemption, highest withholding), "S" ($1,500), "MS" ($1,500), "M" ($3,000), and "H" ($3,000) plus your dependent count. A federal W-4 is not an acceptable substitute — no A-4 on file means withholding at "0". Bonuses and commissions may be withheld at a flat 5%.

City occupational tax ("Birmingham Occ Tax", "City Occ Lic Fee") — only if you work inside one of about 25 cities. Birmingham takes 1% of gross wages for work performed inside city limits (Birmingham Code § 3A-2-2), Gadsden 2%, Bessemer 1% (rate from ordinance summaries; not confirmed on a city-hosted text page). It follows where you work, not where you live: a Hoover resident commuting downtown pays it; a Birmingham resident working in Hoover does not. Alabama has no county income taxes.

What you will NOT see in 2026: an unemployment insurance line (employer-only, on the first $8,000 of wages — Ala. Code § 25-4); state disability insurance or paid family leave (Alabama has neither); and no "overtime exempt" adjustment — the state-tax exemption for FLSA overtime ended June 30, 2025. The 2026–2028 replacement (Act 2026-604) is a deduction of up to $1,000 for the overtime premium only, claimed on your return; ADOR states it does not change wages, withholding, or taxes on the W-2, so it never touches a paycheck.

Plus the federal lines on every US stub: federal income tax, Social Security (6.2% up to $184,500 in 2026), and Medicare (1.45%, plus 0.9% on wages over $200,000).

Alabama paycheck facts — 2026

What you actually take home in Alabama (2026 estimates)

Estimated for a single filer with Form A-4 code "S" and no dependents, including federal income tax, Social Security, Medicare, and Alabama state tax (statutory 2/4/5% brackets after the phased-down standard deduction, the $1,500 personal exemption, and the deduction for federal income tax). No city occupational tax is included in the main rows — see the Birmingham row for the 1% effect:

Where the money goes at $60,000: Alabama state tax is about $2,509, or 4.2% of gross — federal withholding of about $5,020 comes off first, then the $2,500 standard deduction and $1,500 exemption, leaving $50,980 taxed at 2/4/5%. Without the federal-tax deduction the state figure would be $2,760. Federal income tax and FICA take about 16%.

Work in Birmingham and the city takes another $600 (1% of gross); Gadsden's 2% would take $1,200. We found no occupational tax reported in Huntsville, Mobile, or Montgomery, but we did not separately verify that absence with each city — check your own city before assuming there is no line.

Methodology: 2026 federal brackets and $16,100 standard deduction (IRS Rev. Proc. 2025-32), FICA per SSA, Alabama Code § 40-18-5 brackets after the § 40-18-15(b) standard deduction schedule, the § 40-18-19 personal exemption, and the federal income tax deduction (ADOR Withholding Tax Tables & Instructions, January 2026). Alabama's 2026 amounts are the statutory values already used in the January 2026 withholding booklet; the 2026 Form 40 itself is published in January 2027. Estimates only — your withholding depends on your W-4/A-4, dependents, work location, credits, and pre-tax benefits.

What Alabama jobs pay (BLS, May 2025)

Alabama's median hourly wage across all occupations is $21.96 — about 10% below the national median of $24.51 (BLS OEWS, May 2025). At the median annual wage of $45,670 a single filer pays about $1,878 in Alabama tax, and a waiter at the $12.91 median (tips included) is working on a $2.13 federal cash minimum with no state floor above it.

Alabama's workforce in numbers

• 5.2 million residents, civilian labor force of 2.4 million, unemployment 3.4% (Census 2025 estimate; BLS, July 2026 preliminary)
• 388,978 self-employed (nonemployer) businesses (Census, 2023) — about one for every 13 residents, and 3.7 times the number of businesses with employees
• 1.8 million people on employer payrolls at 105,720 establishments, earning $101 billion a year (Census County Business Patterns, 2023)
• Mean annual wage: $57,500 (BLS OEWS, May 2025)

Alabama pay rules — the answers people actually need

Final paycheck: no Alabama deadline, whether you quit or were fired. The Alabama Department of Labor states that Alabama has no state laws governing wage and hour issues, so the federal Fair Labor Standards Act governs — and under federal practice your final wages are due on the next regular payday. There is no state statute requiring payout of unused vacation or PTO; that follows your employer's written policy. Unpaid wages are pursued through the U.S. Department of Labor's Wage and Hour Division (Montgomery, Birmingham, and Mobile offices) or as a contract claim in state court — ADOL has no wage-claim unit.

Pay frequency: your employer chooses. No general Alabama statute sets a pay schedule. The lone exception is Code of Ala. § 37-8-270: public service corporations in transportation with 50 or more employees must pay at least every two weeks or twice a month, covering work up to 15 days before payday, with a $25–$250 misdemeanor fine per offense per day per employee. State employees are paid semi-monthly or monthly under § 36-6-1.

Is a pay stub required? No. Alabama has no statute requiring an itemized wage statement, its contents, or its format. Federal law (29 CFR Part 516) requires employers to keep payroll records — hours, rate, deductions — for three years but does not require handing you a stub. In practice, employers withholding Birmingham or Gadsden occupational tax must track days worked inside the city (Birmingham § 3A-2-34), so most Alabama employers issue itemized stubs anyway. Your W-2 reports Alabama wages in box 16 and tax in box 17; the 2026 overtime premium appears in box 12, code TT.

Minimum wage: $7.25 federal, $2.13 tipped cash wage — and cities cannot go higher. Alabama has no state minimum-wage law, so the federal rate (unchanged since July 24, 2009) is the floor, with a tip credit of up to $5.12. The Alabama Uniform Minimum Wage and Right to Work Act (§ 25-7-41, 2016) bars any city or county from requiring a wage or benefit not required by state or federal law — it was passed to void Birmingham's $10.10 ordinance. A 2026 bill for $10.00 from 2027 (SB171) died in committee, so nothing is scheduled. Workers at tiny businesses outside FLSA coverage have no minimum wage at all.

Overtime on the stub in 2026. Time-and-a-half overtime is fully subject to Alabama withholding again — the state-tax exemption under Acts 2023-421 and 2024-437 ended June 30, 2025 and was not extended. For tax years 2026–2028, Act 2026-604 (HB527, signed April 16, 2026) lets you deduct the premium half of your overtime, up to $1,000 a year, on your Alabama return. Your employer reports the premium in W-2 box 12 (code TT) while total overtime stays in box 16; nothing changes on the paycheck.

City occupational taxes — the only local line on an Alabama stub (2026)

Alabama does not allow local minimum wages (§ 25-7-41), but under § 11-51-90 about two dozen municipalities levy an occupational license tax on gross wages earned for work performed inside city limits, withheld by the employer. It is triggered by where the work is done, not where you live — residence in Birmingham alone does not create the line. There are no county income taxes.

Birmingham's rate is 1% of gross compensation (Birmingham Code § 3A-2-2, Ordinance 97-184), remitted monthly by the employer (§ 3A-2-24/-34); domestic workers in private homes, unemployment benefits, workers' compensation, expense reimbursements, and pensions are exempt, and days worked outside the city may be apportioned. Gadsden levies 2% (per the Gadsden–Etowah Industrial Development Authority). Bessemer's 1% comes from ordinance summaries and is not confirmed on a city-hosted text page. Rates reported for Auburn (1%), Opelika (1.5%), Leeds (1%), and Rainbow City and Tuskegee (2%) are secondary-sourced — check the city ordinance before relying on them. Bills to phase out municipal occupational taxes have failed repeatedly, including in the 2026 session.

At $60,000, Birmingham's 1% is $600 a year — about $23 per biweekly check — on top of roughly $2,509 in Alabama state tax. The same salary in Gadsden loses $1,200 to the city.

How Alabama compares with its neighbors (take-home on $60,000, 2026 est.)

Two of Alabama's four neighbors — Tennessee and Florida — have no income tax at all, so a $60,000 earner crossing into either keeps about $2,509 more a year. Against Georgia and Mississippi the gap is narrower than Alabama's 5% headline suggests, because the deduction for federal income tax pulls Alabama's effective state rate at $60,000 down to about 4.2% of gross.

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