Alabama Paycheck Calculator

Alabama has a graduated income tax with three brackets: 2% (up to $500), 4% ($501–$3,000), and 5% (above $3,000 for single filers). The 5% top bracket begins at an extremely low $3,000 threshold, meaning virtually all employed Alabamians pay 5% on almost all of their wages. The low bracket thresholds have not been updated for decades.

Alabama is one of the few states that allows a federal income tax deduction on the state return — a historical quirk that can significantly reduce Alabama taxable income for higher earners. For example, if you pay $15,000 in federal income tax, you can deduct that $15,000 from your Alabama income, reducing Alabama taxable income by $15,000.

Several Alabama cities and counties levy local occupational taxes: Birmingham has a 1% occupational tax on wages, Bessemer charges 1%, and some other municipalities also have local occupational taxes. These are deducted from wages earned within city limits for both residents and workers.

Country

Gross income

$

United States settings

Take-home pay /2 wks

$2,852

$74,152 / year

$3,846

Gross /2 wks

$994

Total deductions

25.8%

Effective tax rate

22.0%

Marginal tax rate

Take-home74.2%
Take-home$74,152
Federal/Income tax$13,459
FICA / NI / CPP$7,650

Disclaimer

This calculator provides estimates for informational purposes only. Actual tax withholding may vary based on specific circumstances. This is not tax, legal, or financial advice. Consult a qualified professional for personalized guidance.

No personal data leaves your browser. All calculations happen locally. Shareable links encode your inputs in the URL — don't share links with sensitive salary details publicly.

Tax tables: 2026 IRS Publication 15-T | HMRC 2025-2026 | CRA 2026 | ATO 2025-2026 | Income Tax India FY 2025-26

Key Tax Facts

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Alabama income tax: 2% (up to $500), 4% ($501–$3,000), 5% (above $3,000 single).

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Top 5% rate effectively applies to almost all wages.

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Alabama allows a deduction for federal income taxes paid — reduces AL taxable income.

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Birmingham occupational tax: 1% on wages earned within city limits.

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Alabama standard deduction: $2,500 (single), $7,500 (MFJ).

Frequently Asked Questions

What are Alabama's income tax rates?expand_more
Alabama has three brackets: 2% on the first $500 of taxable income, 4% on $501–$3,000, and 5% above $3,000 for single filers (double for MFJ, roughly). Because the top bracket kicks in at just $3,000, virtually every full-time worker pays 5% on the vast majority of their wages. Brackets have not been updated for inflation in many years.
Does Alabama allow a deduction for federal income taxes?expand_more
Yes. Alabama is one of a handful of states that allows you to deduct your actual federal income tax liability from your Alabama taxable income. This is a significant benefit for higher earners — someone who pays $20,000 in federal income tax can deduct that $20,000 from their Alabama taxable income, saving $1,000 in Alabama state tax (5% × $20,000).
Does Birmingham have a local income tax?expand_more
Yes. Birmingham has a 1% occupational tax on wages earned within city limits, applying to both residents and non-residents who work in Birmingham. Bessemer, Auburn, and a few other Alabama cities also have local occupational taxes. These appear on your pay stub as a local city tax deduction.

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