Alabama Payroll Taxes for Employers (2026): SUTA and State Programs
Last updated: 2026-10-12 · 2026 rates checked against Alabama Department of Workforce's own pages and the other official sources below
Alabama employers pay state unemployment tax (SUTA) on the first $8,000 of each employee's wages in 2026, and new employers pay 2.7% — at most $216.00 per employee for the year. Every Alabama employer also pays federal Social Security (6.2% up to $184,500), Medicare (1.45%) and FUTA (0.6% on the first $7,000).
What will payroll taxes cost me in Alabama?
Enter your headcount and average pay to see the employer's share of Alabama and federal payroll taxes for 2026. Change the SUTA rate to the one on your rate notice.
Alabama employer payroll tax estimator · 2026
Runs in your browser · nothing is sent anywhere| Tax | Per year |
|---|---|
Alabama unemployment (SUTA) 2.7% × first $8,000 per employee | $1,080 |
Federal unemployment (FUTA) 0.6% × first $7,000 after the full state credit | $210 |
Social Security (employer half) 6.2% × first $184,500 | $15,500 |
Medicare (employer half) 1.45% of all wages | $3,625 |
| Total employer taxes | $20,415 |
| Per employee | $4,083 |
Assumes every employee earns the average and works in Alabama all year. Workers' comp premiums and benefits are extra — the payroll cost calculator adds them.
Alabama unemployment insurance tax (SUTA) in 2026
- 2026 taxable wage base
- $8,000 per employee (44th highest of 51)
- New-employer rate
- 2.7%
- How the new-employer rate works
- New employers pay 2.70% on the first $8,000.
- Most a new employer pays per employee
- $216.00 (2.7% × $8,000)
- Experience-rated range (2026, as published)
- 0.2% to 5.4%. 2026 uses rate Schedule A with 0.00% shared cost.
- 2025 average employer rate
- 0.44% of taxable wages (U.S. DOL)
- Employee contribution
- None — employer-paid only
Same $8,000 wage base as Arizona and Virginia. Register with Alabama Department of Workforce when you first pay wages in Alabama; you get an account number for quarterly wage reports and tax payments.
Federal payroll taxes every Alabama employer pays
- Social Security: 6.2% from you and 6.2% withheld from the employee, on wages up to $184,500 in 2026.
- Medicare: 1.45% each on all wages; withhold an extra 0.9% (employee only) on wages over $200,000.
- FUTA: 6.0% of the first $7,000 per employee, less up to 5.4% credit for Alabama unemployment tax paid on time = 0.6%, or $42 per employee.
- Federal income tax withholding from each paycheck based on the employee's Form W-4.
Next for Alabama employers: Alabama paycheck calculator (employee withholding) · Alabama new hire reporting · Alabama payday & final paycheck rules · Alabama workers' comp · full payroll cost calculator
Alabama payroll tax FAQ
What is the Alabama SUTA rate for new employers in 2026?
2.7%. New employers pay 2.70% on the first $8,000.
What is the Alabama SUTA wage base for 2026?
$8,000 per employee. Once an employee's 2026 wages pass that amount, you stop paying Alabama unemployment tax on them for the rest of the year. That is the 44th highest wage base of the 50 states and DC (the federal FUTA base is $7,000).
Do employees pay unemployment tax in Alabama?
No. In Alabama unemployment tax is paid only by the employer; it can't be deducted from pay. Only Alaska, New Jersey and Pennsylvania collect an employee share.
What other payroll taxes do Alabama employers pay?
For 2026, Alabama has no statewide paid-leave or disability payroll tax, so the state-level employer tax is unemployment insurance. You still withhold any state income tax from employees' pay.
How much FUTA do Alabama employers pay?
0.6% of the first $7,000 of each employee's wages — $42 per employee per year — after the full 5.4% credit for paying Alabama unemployment tax on time. Alabama is not a credit-reduction state for 2026.
How does my Alabama SUTA rate change after the first years?
New employers keep the new-employer rate until they have enough history to be experience-rated (the timing is set by state law). After that, Alabama Department of Workforce assigns a rate each year based on your layoffs and benefit charges; published 2026 rates run from 0.2% to 5.4% (2026 uses rate Schedule A with 0.00% shared cost). Use the rate on your annual rate notice. The 2025 average employer rate in Alabama was 0.44% of taxable wages.
Official Sources
Figures checked against these sources on 2026-10-12Related Resources on This Site
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Payroll taxes in other states
All states in one table, plus federal deposit rules and deadlines →
General information, not tax advice. Rates change every year; confirm yours on the notice from Alabama Department of Workforce before filing.