Alabama Paycheck Calculator

Alabama imposes a state income tax of 4.0%. Flat rate with local deductions. Your actual Alabama tax liability depends on your filing status, deductions, and taxable income.

In addition to Alabama state tax, all workers pay federal income tax (10%—7% progressive brackets) and FICA taxes (7.65% combined). Use our calculator above to see your complete tax breakdown.

Alabama has a flat state income tax rate of 4% on taxable income after deductions. The Alabama Department of Revenue administers state taxes. The state offers a standard deduction and allows itemized deductions similar to federal deductions.

Local Taxes: Alabama is unique in that it allows cities and school districts to levy local income taxes, known as "residential district taxes." These local rates typically range from 0.5% to 2% depending on where you live or work. Not all municipalities impose these taxes, so your actual tax burden can vary significantly based on location.

Sales & Property Tax: Alabama's state sales tax rate is 4%, with local additions bringing the combined rate to up to 11% in some areas. Property taxes in Alabama are relatively low, with the average effective rate around 0.4% to 0.6% of assessed value.

Business Environment: Alabama has made significant strides in economic development, attracting automotive manufacturing (Mercedes, Honda, Hyundai) and aerospace industries. The state offers various tax incentives for businesses.

Alabama is home to the U.S. Space & Rocket Center in Huntsville and has a diverse economy spanning aerospace, automotive manufacturing, and agriculture. The state's flat income tax of 4.0% applies to all taxable income above the standard deduction.