Alabama income tax brackets for 2026
Alabama taxes wages at rates from 2% to 5%. The rates apply to taxable income: your wages after pre-tax deductions and the deductions and exemptions shown below.
| Single: taxable income | Rate |
|---|---|
| Up to $500 | 2% |
| $500 to $3,000 | 4% |
| Over $3,000 | 5% |
| Married filing jointly: taxable income | Rate |
|---|---|
| Up to $1,000 | 2% |
| $1,000 to $6,000 | 4% |
| Over $6,000 | 5% |
Deductions, exemptions and credits
| Standard deduction | $3,000 single · $8,500 married · $5,200 head of household (shrinks at higher incomes) |
|---|---|
| Personal exemption | $1,500 single · $3,000 married |
| Dependent exemption | $1,000 each |
| Federal income tax | Deductible in full |
- Alabama is one of the few states that lets you deduct the federal income tax you pay, which lowers your state taxable income.
- The standard deduction shrinks as income rises: $3,000 for a single filer falls to $2,500 by about $35,500 of income, and $8,500 for a married couple falls to $5,000.
- The 5% top rate starts at just $3,000 of taxable income ($6,000 for couples), so almost every full-time worker pays it on most of their income.
No Alabama payroll deductions
Alabama does not take disability, paid leave or unemployment contributions from employees. State unemployment insurance is paid by employers, so the only deductions from a Alabama paycheck are federal taxes, Alabama income tax and anything you choose, such as 401(k) contributions or health insurance.
Local income taxes in Alabama
Some Alabama cities and counties charge an occupational tax on wages earned there, usually 1%: Birmingham, Bessemer, Auburn and Opelika charge 1%, and Gadsden and a few nearby cities charge 2%. It applies to residents and non-residents who work in the city.
Local taxes are not added automatically because they depend on your address and where you work. Enter your rate in the Local income tax field to include it.
Example: $60,000 salary in Alabama
A single filer earning $60,000 a year, paid every two weeks, with a standard 2026 W-4 and no 401(k) or health deductions:
| Every two weeks | Per paycheck | Per year |
|---|---|---|
| Gross pay | $2,307.69 | $60,000.00 |
| Federal income tax | -$193.08 | -$5,020.00 |
| Social Security (6.2%) | -$143.08 | -$3,720.00 |
| Medicare (1.45%) | -$33.46 | -$870.00 |
| Alabama income tax | -$96.50 | -$2,509.00 |
| Take-home pay | $1,841.58 | $47,881.00 |
Alabama income tax is about $2,509.00 a year here, 4.18% of gross pay. All taxes together take 20.2% of pay. Federal withholding is the 2026 single schedule: $60,000 less the $8,600 allowance gives $51,400, taxed at $1,240 plus 12% above $19,900, or $5,020 a year.
Take-home pay in Alabama at different salaries
Yearly take-home pay for a single filer in Alabama, paid every two weeks, with no pre-tax deductions or local tax. For a married couple filing jointly on $120,000, take-home pay is about $95,762 a year (20.2% in taxes).
| Salary | Alabama tax | Take-home per year | Per paycheck |
|---|---|---|---|
| $30,000 | $1,175 | $25,110 | $965.76 |
| $45,000 | $1,849 | $36,489 | $1,403.40 |
| $60,000 | $2,509 | $47,881 | $1,841.58 |
| $80,000 | $3,322 | $61,789 | $2,376.48 |
| $100,000 | $4,102 | $75,079 | $2,887.63 |
| $150,000 | $6,023 | $107,768 | $4,144.91 |
| $250,000 | $9,695 | $173,487 | $6,672.58 |
How the Alabama paycheck estimate works
Federal income tax follows IRS Publication 15-T for 2026: your paycheck is annualized, an allowance for the standard deduction is taken off, the 2026 withholding schedule for your filing status is applied, and W-4 credits and extra withholding are added back per paycheck. Social Security is 6.2% of wages up to $184,500 and Medicare 1.45%, plus 0.9% on wages over $200,000.
Alabama tax is estimated for the whole year: wages after pre-tax deductions, less the standard deduction, less exemptions, less the federal income tax withheld, run through the brackets above, then divided by the number of paychecks.
Alabama tax = Brackets(Wages − pre-tax deductions − standard deduction − exemptions − federal tax)