Alabama Compliance and Regulatory Resources

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State Tax Rates and Limits

State Supplemental Withholding Rate*

5.0%

2025 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

Registration instructions for Alabama state withholding
- Registration might take 3 to 5 business days to process. You will receive a Tax Account Certificate by mail that contains your new account number with format 0000XXXXXX (0000 and 6 digits) or R0XXXXXXXX (R0 and 7 digits)
- Email your registration confirmation and Electronic Funds Transfer Authorization Agreement to your Paychex Service Professional.

State Unemployment Insurance (SUI) Registration

Registration instructions for Alabama SUI. There is immediate registration approval upon completion
- An account summary confirmation will appear with your SUI ID with the format: XX-XXXXXX-XX (10 digits)
- Complete and notarize the Alabama SUI Power of Attorney (POA). Email the POA and the registration confirmation to your Paychex Service Professional.

Entering your account numbers in Paychex Flex: Enter your new account number in your Paychex Flex® account to ensure that your Paychex account is updated and email your registration confirmation document to your Paychex Service Professional.

Refer to the Updating Tax Agency IDs in Paychex Flex instructions to update the information in the application.

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