Employer payroll taxes in Alabama for 2026
On top of each paycheck, a Alabama employer pays these taxes. None of them come out of the employee's pay. On a $60,000 salary they add $4,848.00 a year, so the employee costs $64,848.00.
| Employer tax | Rate | Wages taxed |
|---|---|---|
| Social Security | 6.2% | First $184,500 |
| Medicare | 1.45% | No limit |
| Federal unemployment (FUTA) | 0.6% | First $7,000 |
| Alabama unemployment (SUTA) | 2.7% for new employers | First $8,000 |
Alabama unemployment tax (SUTA)
Alabama employers pay state unemployment tax on the first $8,000 of each employee's wages in 2026. A new employer starts at 2.7%, and experienced employers pay from 0.2% to 5.4% depending on their layoff history.
New employers pay 2.7%, construction included, until they have a rating history.
What an employee costs in Alabama
Yearly employer taxes and total cost for a single filer paid every two weeks, at the new-employer unemployment rate, for an employer with 10 employees. Benefits and workers' compensation insurance are extra.
| Salary | Employer taxes | Total cost | Added to pay | Employee take-home |
|---|---|---|---|---|
| $30,000 | $2,553.00 | $32,553 | 8.5% | $25,110 |
| $40,000 | $3,318.00 | $43,318 | 8.3% | $32,691 |
| $50,000 | $4,083.00 | $54,083 | 8.2% | $40,286 |
| $60,000 | $4,848.00 | $64,848 | 8.1% | $47,881 |
| $75,000 | $5,995.50 | $80,996 | 8% | $58,466 |
| $100,000 | $7,908.00 | $107,908 | 7.9% | $75,079 |
| $125,000 | $9,820.50 | $134,821 | 7.9% | $91,630 |
| $150,000 | $11,733.00 | $161,733 | 7.8% | $107,768 |
Withholding from Alabama paychecks
From the employee's pay you withhold federal income tax under the W-4, 6.2% Social Security, 1.45% Medicare and Alabama income tax. Employees checking their own pay can use the Alabama paycheck calculator. Running a bonus? Use the bonus payroll calculator.
Alabama employer taxes compared with nearby states
The same $60,000 employee, at each state's new-employer unemployment rate. Of the states that border Alabama, Mississippi has the lowest employer taxes.
| State | State unemployment | All employer taxes | Total cost |
|---|---|---|---|
| Alabama | $216.00 | $4,848.00 | $64,848 |
| Florida payroll calculator | $189.00 | $4,821.00 | $64,821 |
| Georgia payroll calculator | $256.50 | $4,888.50 | $64,889 |
| Mississippi payroll calculator | $168.00 | $4,800.00 | $64,800 |
| Tennessee payroll calculator | $189.00 | $4,821.00 | $64,821 |
Sources
Alabama unemployment and program rates come from the state's own 2026 figures: workforce.alabama.gov, workforce.alabama.gov, labor.alabama.gov. Federal figures follow IRS Publication 15 and Publication 15-T. See how we calculate for the withholding method.