Employer’s Obligations for Alabama State Payroll Taxes
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Also, StubsonDemand provides information about the payroll requirements for the state.
What information about Alabama State Payroll Taxes should employers be aware of?
StubsonDemand will be suitable for those who are doing payroll on their own. StubsonDemand covers all the information required for Alabama state withholding taxes and provides you with the exact details to keep payroll under your control.
In addition to the federal withholding, employers in Alabama are also accountable for the following state payroll tax requirements:
Alabama State Minimum Wage Requirements
As a result, employers are required to pay their staff the $7.25/hour federal minimum wage. Although this rate is standard across all industries, tipped workers who receive $30 in tips each month must be paid at least $2.13 per hour.
Alabama State New Hire Reporting
Within seven days of the employee’s date of hire or reemployment, all employers are required to report their newly hired and rehired employees to the Alabama Department of Labor.
- Employers can be fined up to $25 for each violation if they don’t report to the state agency.
- Employers may send copies of Form W-4 to the New Hire Unit or may do it electronically.
- Alabama state law does not require the reporting of independent contractors.
Filing the New Hire Report Form Online
Through the Alabama New-Hire Electronic Filing System, employers can submit new-hire report forms online. Use this method if there are more than five employees.
If there are fewer than five employees, employers may send copies of Form W-4 to the Department of Labor New Hire Unit.
Mailing New Hire Report Form
Send the New Hire Report Form, fully completed, to the address provided:
Alabama Department of Labor
649 Monroe Street, Room 3205
Montgomery, AL 36131
Alabama State Withholding Tax
- Alabama requires employers to withhold state income taxes from employees’ pay by filling out Form A4-Employee’s Withholding Tax Exemption Certificate in addition to the Federal Form W-4.
- Alabama does not have any reciprocal agreements with other states in the U.S.
- The Alabama State Tax Rate for Supplemental Wages is 5.0%.
Alabama’s State Unemployment Insurance Tax (SUI)
- Alabama SUTA wage base limit for 2022: $8,000
- Alabama SUTA tax rates for 2022 are 0.65 to 6.8%.
- Alabama SUTA tax rates for new employers: 2.7%
Other Payroll Requirements in Alabama
Alabama Termination Pay: The state does not have any laws that mandate an employer to pay wages to their employees who quit their jobs, leave work due to a dispute, are terminated, or are laid off. Remit withholding for child support to:
Alabama Central Disbursement Division
P. O. Box 4960, Montgomery,
Alabama State Local Taxes
- In Alabama’s cities and counties, there are no local taxes.
- However, municipal occupational taxes may exist for the following locations: Attalla, Auburn, Bear Creek, Beaverton, Bessemer, Birmingham, Brilliant, Fairfield, Gasdsen, Glencoe, Guin, Haleyville, Hamilton, Irondale, Leeds, Lynn, Macon (county), Midfield, Mosses, Opelika, Rainbow City, Red Bay, Shorter, Southside, Sulligent, Tarrant, and Tuskegee.
When is the state payroll tax payment due in Alabama?
Alabama’s state requires tax payments to be made on a quarterly, monthly, and annual basis.
- Form AL-A-1: Quarterly Withholding Return
- Form AL-A-6: Monthly Return for the Department of Revenue
- Form AL-A-3: Annual Reconciliation of Income Tax Withholdings
However, tax deposits for unemployment insurance are due each quarter and must be filed with the Alabama Department of Labor.
Alabama State Deposit Requirement
Employers in Alabama are required to electronically file payments and returns through the department’s electronic filing system, My Alabama Taxes, for payments of more than $750 (MAT). Other employers may electronically file and pay taxes (regardless of the payment amount).
Quarterly Tax Deposit Requirement
- All employers and withholding agents must file Form A-1, a quarterly tax report form, whether or not any tax is withheld.
- The last day of the first month after the end of the quarters is when the quarterly form is due.
- March 31, June 30, September 30, and December 31 are when the payments are due.
Monthly Tax Deposit Requirements
- A monthly Form A-6 is required for each of the following months, which has withholdings of more than $1,000.
- The months are January, February, April, May, July, August, October, and November.
- The due date to submit Form A-6 is the 15th day of the month immediately following the month in which more than $1,000 was withheld.
Quarterly Alabama Payroll Tax Filings
Employers can file their withholding returns using My Alabama Taxes (MAT). The website of the Alabama Department of Revenue provides access to MAT. The unemployment insurance must be filed quarterly with the Alabama Department of Labor using the Alabama Department of Labor’s online application, eGov.
When are Forms AL-A-1, AL-A-3, AL-A-6, and AL-UC-CR4 due?
- Form AL-A-3: Every year on the last day of January, income tax withholdings for the previous year are due.
- Form AL-A-1: On March 31, June 30, September 30, and December 31, the quarterly withholding return is due.
- Form AL-A-6: The 15th day of the month following the month in which more than $1,000 was withheld is the deadline for submitting a Department of Revenue Monthly Return.
- Form AL-UC-CR4: The deadlines for submitting a quarterly contribution report are March 31, June 30, September 30, and December 31.
The forms must be submitted by the end of the next business day if the due date falls on a weekend or a legal holiday.
Annual Alabama Payroll Tax Filing
Employers in Alabama must provide Form W-2 wage and tax statements to their staff members by January 31. Additionally, copies of Form W-2 must be submitted to the department by January 31st, along with Form A-3.
Employers must electronically file W-2 forms with the department if they are submitting more than 25 of them. Employers are encouraged to submit their annual reconciliation electronically voluntarily if there are fewer than 25 forms.