Alabama Withholding Tables: Wage Brackets, Filing, and Reconciliation

Alabama employers determine how much state income tax to withhold from each paycheck using the Alabama withholding tables published by the Alabama Department of Revenue (ALDOR), most recently revised in January 2026.1Alabama Department of Revenue. Withholding Tax Tables and Instructions for Employers and Withholding Agents – Revised January 2026 The amount comes out of three pieces of information about the employee: filing status, number of dependents, and how often they get paid. Match those against the correct table, find the row for the employee’s gross wages, and the withholding amount is right there.

What You Need From the Employee First

Before you can use any table, the employee has to fill out Alabama Form A-4, the Employee’s Withholding Exemption Certificate. Every new hire completes one before the first paycheck.2Alabama Administrative Code. Alabama Administrative Code 810-3-73-.01 – Withholding Exemption Certificates The form gives you the filing status and the dependent count you’ll carry into the tables.

Filing status appears on the A-4 as a letter code:

If a new employee never turns in a signed A-4, you must withhold using zero exemptions, which is the largest possible deduction from their pay.2Alabama Administrative Code. Alabama Administrative Code 810-3-73-.01 – Withholding Exemption Certificates

How to Read the Wage Bracket Tables

ALDOR publishes separate wage bracket tables for weekly, biweekly, semimonthly, monthly, and daily pay periods in its January 2026 withholding booklet.1Alabama Department of Revenue. Withholding Tax Tables and Instructions for Employers and Withholding Agents – Revised January 2026 The steps are the same for each table:

  1. Pick the table that matches the pay frequency and the filing status from the A-4.
  2. Find the row containing the employee’s gross wages for the period.
  3. Move across to the column for the number of dependents claimed.
  4. Read the dollar figure at that intersection. That’s the amount to withhold.

The tables already account for Alabama’s standard deduction and personal exemption, so you don’t compute those separately. The standard deduction itself is not a fixed dollar amount in Alabama; it starts at a maximum tied to filing status and phases down as gross income rises, with the specifics laid out in the administrative code.4Alabama Administrative Code. Alabama Administrative Code 810-3-71-.02 – Computing Tax Withheld The booklet bakes all of that math into the bracket amounts.

Dependent allowances are also folded in, but note that Alabama’s per-dependent deduction changes with income: $1,000 per dependent at annual gross income of $20,000 or less, $500 per dependent between $20,001 and $100,000, and $300 per dependent above $100,000.4Alabama Administrative Code. Alabama Administrative Code 810-3-71-.02 – Computing Tax Withheld The wage bracket tables handle this automatically when you match the row for the employee’s gross pay to the dependent column.

When the Tables Don’t Cover the Wages

Each wage bracket table stops at a maximum wage per period. If the employee earns more than the highest bracket, you have to switch to the percentage method. Most payroll software uses this method regardless.

The percentage method follows a set sequence:4Alabama Administrative Code. Alabama Administrative Code 810-3-71-.02 – Computing Tax Withheld

  1. Annualize the gross pay by multiplying the per-period amount by the number of periods per year (52 weekly, 26 biweekly, 24 semimonthly, 12 monthly).
  2. Subtract the annualized standard deduction based on filing status and gross income.
  3. Subtract the personal exemption: $1,500 for S or MS, $3,000 for M or H, $0 for 0 status.
  4. Subtract the dependent allowance ($1,000, $500, or $300 per dependent depending on income).
  5. Apply Alabama’s graduated tax rates to what’s left.
  6. Divide the annual tax by the number of pay periods.

The graduated rates depend on filing status:5Alabama Department of Revenue. Individual Income Tax – Section: Rate

  • Single, Head of Family, or Married Filing Separately: 2% on the first $500, 4% on the next $2,500, and 5% on everything above $3,000.
  • Married Filing Jointly: 2% on the first $1,000, 4% on the next $5,000, and 5% on everything above $6,000.

Bonuses, Commissions, and Overtime

Supplemental wages have their own rules. Alabama gives you three ways to handle them:6Alabama Department of Revenue. Alabama Administrative Code 810-3-71-.02 – Computing Tax Withheld

  • Combine the supplemental amount with the regular paycheck when they’re paid together and compute withholding on the total.
  • Use the aggregate method when the payments are separate: add the supplemental payment to the most recent regular paycheck, compute tax on the combined amount, and subtract the tax already calculated on the regular wages. The remainder is what you withhold on the supplemental pay.
  • Withhold a flat 5% of the supplemental amount, with no adjustment for exemptions or dependents. This is the most common choice for one-off bonuses.

Filing and Paying What You Withheld

How often you remit depends on how much you withhold. If you withhold more than $1,000 in either the first or second month of a calendar quarter, you file a monthly return on Form A-6 and pay between the 1st and 15th of the following month.1Alabama Department of Revenue. Withholding Tax Tables and Instructions for Employers and Withholding Agents – Revised January 2026 Employers below that threshold pay quarterly instead.

Every employer files a quarterly return on Form A-1 by the last day of the month after the quarter ends, whether or not there are monthly payments to reconcile against it. The quarterly return covers total withholding for the quarter minus what you already sent in on monthly A-6 filings. You still file the A-1 for a quarter with zero withholding unless ALDOR has closed your account.7Alabama Administrative Code. Alabama Administrative Code 810-3-74-.01 – Withholding Returns and Payments

Any single tax payment of $750 or more has to go through the My Alabama Taxes (MAT) portal, both the return and the payment.8Alabama Department of Revenue. Electronic Filing of Withholding Tax and Annual Reconciliation of Alabama Income Tax Withheld

Year-End Reconciliation on Form A-3

After year-end, file Form A-3 (Annual Reconciliation of Alabama Income Tax Withheld) with copies of all employee W-2s and any 1099s that had Alabama tax withheld. The deadline is January 31.8Alabama Department of Revenue. Electronic Filing of Withholding Tax and Annual Reconciliation of Alabama Income Tax Withheld

Electronic filing of W-2s is required if you’re submitting 10 or more forms, or if you filed and paid electronically at any point during the year. MAT checks the number of W-2s you upload against the count on the A-3, and it compares total state tax withheld on those W-2s against the reconciliation total. It will reject the submission if the numbers don’t match, so square up your records first.

Penalties for Late or Missing Payments

Late withholding payments carry a 10% penalty on the unpaid amount, and Alabama adds a second 10% penalty if the balance is still unpaid 30 days after ALDOR issues a notice and demand.9Alabama Administrative Code. Alabama Administrative Code 810-14-1-.30 – Penalty for Failure to Timely Pay Tax Those penalties stack, so an ignored notice can produce a 20% surcharge before interest is calculated.

Employers who fail to withhold or remit become personally liable for the full unpaid tax. Alabama treats withheld income tax as funds held in trust for the state, and the state can lien all of the employer’s property to collect what’s owed.10Alabama Legislature. Alabama Code 40-18-74 – Payment of Amounts Withheld In some situations that liability reaches corporate officers individually.

Short Visits by Out-of-State Employees

Starting January 1, 2026, some nonresident employees are exempt from Alabama withholding under Act 2025-334.11Alabama Department of Revenue. 30-Day Safe Harbor Rule If a nonresident works in Alabama 30 days or fewer during the calendar year, performs duties in more than one state, and isn’t a professional athlete, entertainer, or public figure, you can skip Alabama withholding on their pay. The employee’s home state must also offer a similar short-term exemption, have no individual income tax, or the Alabama income must be exempt under federal law or the U.S. Constitution. If you have employees who occasionally travel into Alabama for meetings or project work, check this rule before running them through the standard tables.