Alabama Payroll Instructions

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US Federal Withholding Tables

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Alabama has state income tax withholding, using four tables to calculate standard deductions for different types of taxpayers. Alabama is one of a few states that use a step table to calculate deductions as well as tax withholding. The calculated deduction amounts did not change in 2021. Alabama formulas have only changed 5 times in the past 31 years, most recently in 2020.

HINT-- We provides free updates for Alabama and federal payroll tax tables in our payroll software. Click here to download the latest withholding tables for Alabama.

Alabama State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Choose Employees from the Accounts menu.
  2. Locate the employee record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field.
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of Alabama dependents into the State Exemptions field.
  7. If an employee uses the zero deduction table (O table), enter the Zero Deduction tax package into the Tax Package field. Otherwise enter the standard Alabama tax package.
  8. Click OK.

Alabama State Unemployment Tax Instructions

Alabama state unemployment tax is paid on the first $8,000 of each employees annual wages (no change from last year). In 2021 the rate for new businesses is 2.70%, followed by a variable rate of 0.65% – 6.8% that depends on payroll volume and unemployment claims by employees.

To enter your Alabama state SUTA tax rate into the Goldenseal construction payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items from the submenu.
  2. You'll see a list of Tax Items. Locate the Alabama SUTA tax in the list, and double-click on it. HINT: If you don't see SUTA in the list, you'll need to import Alabama payroll info first.
  3. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of the First Adjustment field.

Alabama Marital Status

Use the following to determine the value for the Marital Status popup menu in each Employee account:

  • Single- single employee with one personal exemption (S table)
  • Married- married employee with two personal exemptions (M table)
  • Dual Income- married employee with one personal exemption (S table)
  • Head of House- employee claims Head of Family status
  • Other- not used

An additional deduction of Annual Federal tax withheld is already factored into the Alabama state withholding calculation.


Alabama Tax Contacts

Website

Payroll Tax Office-- 334 242-1000
Withholding Info-- 334 242-1300
SUTA-- 334 242-8467 or 334 242-8055
Worker's Comp-- 334 242-2868

Alabama Dept of Revenue-- Income Tax Division
Box 327460
Montgomery AL 36132-7460

Department of Industrial Relations (SUTA)
649 Monroe Street
Montgomery, AL 36131


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