Alabama is one of a handful of states that lets you deduct the federal income tax you paid from your state taxable income — a provision large enough that it changes the arithmetic more than the rates do.
| Gross pay | — |
| Federal income tax | — |
| Social Security6.2% up to $184,500 | — |
| Medicare1.45%, no cap | — |
| State income tax | — |
| 401(k) contribution | — |
| Health and HSA | — |
Useful if you are comparing a job that pays monthly against one that pays every two weeks, or working out what a raise is worth per paycheck.
| Pay schedule | Gross | Take-home |
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Alabama allows federal income tax paid to be deducted from state taxable income. Only a small group of states still do this, and the effect is substantial: the more federal tax you pay, the less Alabama taxable income you have.
For a single filer earning $60,000 and paying roughly $5,000 in federal income tax, that deduction removes $5,000 from Alabama taxable income and cuts the state bill by about $250 — roughly a sixth of what Alabama would otherwise collect.
This calculator does not model the federal deduction. The Alabama figure it shows is therefore higher than what you will actually owe, and the gap widens as your income and federal liability rise. Treat it as a ceiling. This is the one state on this site where the estimate is knowingly conservative in the unfavourable direction, and it is better to say so than to quietly over-report.
Alabama's rates are 2%, 4% and 5%, and the top rate arrives at $3,000 of taxable income for a single filer or $6,000 for a couple. Every full-time worker in the state is in the top bracket.
The standard deduction is $3,000 for a single filer at lower incomes, reduced as income rises and floored at $2,500. The personal exemption is $1,500, with $1,000 per dependent that itself shrinks to $500 above $50,000 of AGI and disappears above $100,000.
Taken together, those are among the smallest allowances in the country. Alabama's headline 5% looks moderate; the narrow deductions mean it applies to nearly all of your income. The federal deduction is what brings it back down.
Several Alabama cities levy an occupational tax on wages earned within their limits, typically around 1%. Birmingham's is the most widely encountered, and Gadsden, Auburn and a number of others operate similar levies.
It applies based on where you work rather than where you live, so commuting into one of these cities triggers it even if your home municipality charges nothing. This calculator shows state tax only.
Separately, Alabama expanded its filing and withholding thresholds for non-resident workers in 2026, which reduces the administrative burden for people working short stints in the state.
Because Alabama lets you deduct federal income tax paid from state taxable income, and this calculator does not model that. The figure shown is a ceiling; your actual liability will be lower, and increasingly so at higher incomes.
From $3,000 of taxable income for a single filer, so effectively all of a normal salary.
Yes, if you work within city limits. It is levied on where the work is performed, not where you live.
$3,000 for a single filer at lower incomes, reducing as AGI rises and floored at $2,500. The dependent exemption also shrinks above $50,000 and disappears above $100,000.