Estimate your take-home pay in Alabama for 2026. The state levies income tax with a top rate of 5% (2% to 5% across 3 brackets). This means a portion of every paycheck goes toward state income tax in addition to federal withholding, Social Security, and Medicare.
Alabama Tax Snapshot
- State Income Tax
- 5% top rate
- Sales Tax (state + local avg)
- 9.24%
- Avg Property Tax Rate
- 0.4%
- Median Home Value
- $179,500
- State Minimum Wage
- $7.25/hr
Did You Know?
Alabama allows a full deduction of federal income taxes paid on state returns.
How Alabama Taxes Affect Your Paycheck
When you earn a paycheck in Alabama, your employer withholds federal income tax, Social Security (6.2%), and Medicare (1.45%). On top of that, the state withholds income tax based on 2% to 5% across 3 brackets. The state minimum wage is $7.25 per hour, which sets the floor for hourly workers. Understanding these deductions helps you budget effectively and plan for the average 0.4% property tax rate on homes valued around $179,500.
Alabama also levies a combined state and average local sales tax of 9.24%, which affects your overall purchasing power. Factor this into your budget when calculating how far your paycheck stretches.