Alabama Compliance and Regulatory Resources

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State Tax Rates and Limits

State Supplemental Withholding Rate*

5.0%

2026 AL Withholding Tables

State Unemployment Taxable Wage Base Limit

$8,000

State Unemployment Rate Range for Employers

0.20% to 5.40%

The state has two surcharges, with the Employment Security Assessment rate of 0.06% not included in this rate range.

State Unemployment New Employer Rate

2.70%

State Hourly Minimum Wage

Federal minimum wage applies ($7.25)

State Minimum Wage for Tipped Employees

N/A

Paid Family Leave

Private insurance plans are an option available for employers to purchase and offer employees paid family leave.

The coverage can be a separate PFL policy or a PFL rider to a disability insurance policy.

Alabama Department of Labor

PFL, in general, offers up to 12 weeks of leave, with potential variance based on certain qualified instances.

E-Verify

All employers with one or more employees working in Alabama must enroll in E-Verify, except for sole proprietors. Businesses with fewer than 25 employees can use the Alabama E-Verify Employer Agent Service in lieu of registering directly with E-Verify.

Penalties: Noncompliance could include probation, suspension and ultimate revocation of business license, and federal fines.

Note to employers: Employers have requirements once enrolled in E-Verify, including but not limited to completion of Form I-9 and its verification (the Three Day Rule). Noncompliance could lead to significant civil fines. Some local municipalities also have E-Verify requirements.

State Tax ID Registration

Withholding Registration

Employers are required to have an active Alabama Withholding identification number and to file electronically with the Alabama Department of Revenue (ADOR).

How to register for a new taxpayer/entity account

Go to the Alabama Department of Revenue.
Scroll down to the Businesses section and select Register a business/Obtain a new tax account number.
Review the registration information and requirements.
At the bottom of the screen select your business entity from the drop-down menu, enter your ID number(s), and indicate if you have are an Existing Taxpayer.
- Select Next.
Complete each section of the registration process.
A Confirmation Page will appear once the registration process is complete.
- Save or print this page for your records.
Note: It will take three to five business days to process your application and ADOR will send a tax account certificate by USPS mail containing your new account number, Sign-on ID, and Access Code for registering for a new My Alabama Taxes (MAT) online account.
Complete the Electronic Funds Transfer Authorization Agreement.
Enter your new account number in Paychex Flex^®and email your registration confirmation document and Electronic Funds Transfer Authorization Agreement to your Paychex Service Professional.
- Refer to Updating Tax IDs for instructions on how to update the information in the applications.

Additional resources:

Alabama DOR contact information, scroll to Income Tax
My Alabama Taxes (MAT) FAQs
My Alabama Taxes (MAT) Video Playlist

State Unemployment Insurance (SUI) Registration

All employers are required to have an active Alabama state unemployment insurance (SUI) account number to file electronically with the Alabama Department of Labor (DOL). The SUI account is also known as the UC Number or SUI ID number.

Paychex must also be authorized as the Third-Party Administrator (TPA) on the account for making any adjustments to returns and payments on your behalf.

How to register a new business

Go to the Alabama Department of Labor registration to register online.
- Register for a new account and complete the steps to register your business.
Complete the Form SR-2, Application to Determine Liability to register by mail.
- Mail the Form SR-2 to:
  State of Alabama Department of Labor
  Unemployment Compensation Division
  649 Monroe Street
  Montgomery, AL 36131
Once you have received your new UC account number, enter your new account number in your Paychex Flex^® account and email your registration confirmation document to your Paychex Service Professional.
- Refer to Updating Tax IDs for instructions on how to update the information in the application.
Authorize Paychex as your Third-Party Administrator.
- Refer to Designating Paychex as Your Third-Party Administrator (TPA) for instructions.

Designating Paychex as your Third-Party Administrator (TPA)

Complete and notarize the Alabama SUI Power of Attorney (POA)
Email your POA form to your Paychex Service Professional.
- If you have received an email from a Paychex Team requesting TPA access, please reply to the email with a copy of your POA form.

Additional resources:

Alabama DOL contact information and FAQs, which includes answers to frequently asked questions and contact information for:
- Experience rating, benefit charging, Power of Attorneys (POA), and tax rate notices
- Tax account numbers
Instructions for Completing Form SR-2.

Workplace Safety

OSHA

Alabama is a federal OSHA state that covers most private-sector workers but not state and local government employees. Additional contact information available

Workers' Compensation

Coverage is mandatory for employers with five (5) or more employees
Construction coverage needed at employee No. 1
Employee includes all full or part-time employees, officers of a corporation, or members of an LLC