How Alabama taxes your paycheck
Alabama's 2%/4%/5% rates are unchanged for 2026, with 5% applying above $3,000 of taxable income ($6,000 for joint filers). Federal income tax paid is fully deductible, the standard deduction is a sliding scale tied to AGI, and personal exemptions are $1,500 single and $3,000 married or head of family. New for 2026, Act 2026-604 allows a deduction of up to $1,000 of overtime premium pay for 2026-2028.
2026 Alabama income tax brackets
| Taxable income (single) | Rate |
|---|---|
| $0 to $500 | 2% |
| $500 to $3,000 | 4% |
| Over $3,000 | 5% |
| Taxable income (married filing jointly) | Rate |
|---|---|
| $0 to $1,000 | 2% |
| $1,000 to $6,000 | 4% |
| Over $6,000 | 5% |
| Deduction or credit | Single | Married | Head of household |
|---|---|---|---|
| Standard deduction | $3,000 | $8,500 | $5,200 |
| Personal exemption | $1,500 | $3,000 | $3,000 |
Local income taxes
Some Alabama cities and counties (for example Birmingham) levy local occupational license taxes on wages. These are administered by the localities, not the Alabama Department of Revenue, and rates vary. Pick your city in the calculator to include it.
| City or area | Rate | Applies to |
|---|---|---|
| Auburn (1% occupation license fee on gross compensation for work done in Auburn, with no deductions. It is based on where you work, not where you live. No 2026 ordinance has changed it.) | 1% | Wages |
| Bessemer (1% occupational tax on gross wages for work done within Bessemer city limits. It is based on where you work, not where you live.) | 1% | Wages |
| Birmingham (1% occupational tax on gross compensation for work done in Birmingham, withheld by employers since Dec 1, 1970. It is based on where you work, not where you live. Source is the codified ordinance; Birmingham's online code was last updated in 2021, but the rate has not changed.) | 1% | Wages |
| Gadsden (2% occupational license fee on gross receipts and compensation for work done in Gadsden. It is based on where you work, not where you live.) | 2% | Wages |
| Opelika (1% occupation license fee on gross compensation for work done in Opelika (section last amended Feb 4, 2025). It is based on where you work, not where you live.) | 1% | Wages |
In Alabama, these taxes depend on where you work, not where you live. Sources: Birmingham City Code, Title 3A Chapter 2 Occupational Tax (Sec. 3A-2-2, 3A-2-5), City of Birmingham, Tax and License Division, City of Bessemer Revenue Dept., Occupational Tax Form (quarterly), City of Bessemer, Business licenses and forms, Gadsden Code of Ordinances (version Jul 20, 2026), Sec. 74-112, City of Gadsden, Revenue Department, Auburn Code of Ordinances, Chapter 12 Article III Occupation License (Sec. 12-34, 12-61), Opelika Code of Ordinances (version Sep 22, 2026), Sec. 14-27.
Take-home pay in Alabama at common salaries
Single filer, 2026 rules, no pre-tax deductions or local taxes.
| Salary | Federal tax | FICA | Alabama taxes | Take-home | Biweekly |
|---|---|---|---|---|---|
| $30,000 | $1,420 | $2,295 | $1,175 | $25,110 | $966 |
| $40,000 | $2,620 | $3,060 | $1,629 | $32,691 | $1,257 |
| $50,000 | $3,820 | $3,825 | $2,069 | $40,286 | $1,549 |
| $60,000 | $5,020 | $4,590 | $2,509 | $47,881 | $1,842 |
| $75,000 | $7,670 | $5,738 | $3,127 | $58,466 | $2,249 |
| $100,000 | $13,170 | $7,650 | $4,102 | $75,079 | $2,888 |
| $150,000 | $24,734 | $11,475 | $6,023 | $107,768 | $4,145 |
How Alabama compares
At a $60,000 salary, Alabama ranks #37 of 51 for take-home pay. The table below shows the states closest in take-home pay.
Minimum wage in Alabama
The Alabama minimum wage is $7.25 an hour as of July 24, 2009. A full-time minimum wage job pays $15,080 a year before taxes and about $13,437 after taxes. See the full Alabama minimum wage guide for tipped wages and scheduled increases.
What this calculator does not include
The calculator applies Alabama's sliding standard deduction (reaching its floor at $35,500 of income) and deducts your full federal income tax, as Alabama allows. Dependent exemptions, the overtime deduction, itemized deductions and local occupational taxes are not included. The calculator also leaves out dependents, tax credits, additional withholding on your W-4 and non-wage income. Your employer's withholding can differ from your final tax bill.
Frequently asked questions
Does Alabama have a state income tax?
Yes. Alabama taxes wages at graduated rates from 2% to 5% for 2026. Your employer withholds it from each paycheck along with federal taxes.
How much is $60,000 after taxes in Alabama?
A single filer earning $60,000 in Alabama keeps about $47,881 a year, or $3,990 a month, in 2026. That ranks 37 of 51 for take-home pay at that salary.
Does Alabama have local income taxes?
Some Alabama cities and counties (for example Birmingham) levy local occupational license taxes on wages. These are administered by the localities, not the Alabama Department of Revenue, and rates vary.
What is the minimum wage in Alabama?
The minimum wage in Alabama is $7.25 an hour as of July 24, 2009. Full time, that is $15,080 a year before taxes and about $13,437 after taxes for a single filer.
Sources
- Alabama DOR Withholding Tax Tables and Instructions for Employers (Revised January 2026)
- Alabama DOR FAQ: What is Alabama's individual income tax rate?
- Alabama DOR: Individual Income Tax General Information (personal exemptions)
- Alabama DOR 2025 Form 40 Instruction Booklet (standard deduction chart, federal tax deduction worksheet)
- Alabama DOR: Overtime Premium Deduction (Act 2026-604)
- IRS Rev. Proc. 2025-32 (2026 federal tax tables)