Alabama (AL) Payroll Guide

There are 2 required tax items you’ll need to get set up for payroll.

How to register: 

Below is the information to follow to set up your company with Alabama for the first time. If you believe you already have a state tax account in place, please contact the respective state agency directly to obtain your existing account credentials.

Withholding Tax Account Number

Register for an AL Withholding Tax Account number by following the steps below:

1. Click the following link to the online registration process with the AL Department of Revenue.
2. Click the Go to MAT link on the registration page. 
3. Fill in your company entity type and FEIN and then click Next to follow all registration steps. 
4. When asked to select the tax types you are applying for, be sure to check the box for Payroll Withholding Tax. From there, you will need to contact the AL Dept of Revenue or your CPA to assist you in determining what additional taxes apply to your business. Please note that some business taxes may apply that we do not handle on your behalf. 
5. Once you complete the online register, it takes 3-5 days to receive an account number. Your newly assigned account number will initiate with either an R or a zero. In the case that your account number is fewer than 10 digits, add zeros to the beginning of the number.

Unemployment Compensation (UC) Account Number

For new businesses, complete the online registration process to obtain your account number from the AL Department of Labor. You'll receive your Alabama Unemployment account number as soon as you finish registration.

Tax Rates

The AL Total Contribution Rate comprises both your AL UI Tax Rate and the uniform AL Employment Security Assessment Rate applicable to all businesses. Most new employers will have a UI tax rate of 2.7%, but you can verify this on your tax rate notice by logging into your AL DOL account.

How to locate these account numbers if you’re already registered:

• If you currently possess an AL Withholding Tax Account Number, you can locate it in correspondence from the AL Department of Revenue or by reaching out to the agency directly at 334-242-1584.
• If you already possess an AL UC Account Number, you can access it online or locate it on the Tax Rate Notice sent by the AL Department of Labor. If uncertain, feel free to contact the agency at 334-242-2067.
• Tax Rate information is online or on the Tax Rate Notice sent by the AL Department of Labor. You can contact the agency with questions at 334 -242-2067.

Local tax requirements

Depending on where your worker lives/works in AL, the following local tax information may apply to you:

• Auburn
• Haleyville
• Irondale Occupational License Fee