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Version: 1.7.3

Alabama Payroll Tax Compliance

Employers in Alabama must meet three key payroll compliance obligations: state income tax withholding, unemployment insurance (UI), and new hire reporting.

Each requirement has its own forms, deadlines, and reporting rules established by the state agencies. The sections below provide a clear overview of these obligations

Alabama Withholding Tax Requirements​

Alabama employers are required to withhold state income tax from employee wages and file returns with the Alabama Department of Revenue (ADOR).

Employers must register for a withholding tax account before filing returns, and returns are required even if no tax was withheld during the reporting period.

Forms required​

Form A-1​
  • Filed quarterly to report the total Alabama income tax withheld during the quarter.
  • Due on the last day of the month following the end of the quarter — April 30, July 31, October 31, and January 31.
Form A-3​
  • Filed annually as the annual reconciliation of Alabama income tax withheld.
  • Due January 31 of the following year and must be submitted along with employee Forms W-2.
Form A-6​
  • Filed monthly to report and remit Alabama income tax withheld from employee wages.
  • Due on the 15th day of the month following the reporting month.
Note:

TaxBandits API supports the automation of A-1 and A-6. See how it works

Alabama Unemployment Insurance (UI) Requirements​

Employers are liable for Alabama unemployment insurance tax, administered by the Alabama Department of Labor (ADOL). Employers must report wages and contributions each quarter.

Forms required​

Form UC-CR4​
  • Filed quarterly to report total wages and calculate unemployment insurance contributions.
  • Due April 30, July 31, October 31, and January 31.
Form UC-10-R​
  • Filed as the employee wage report accompanying the quarterly unemployment tax filing.
  • Required even if no wages were paid during the quarter.

Alabama New Hire Reporting​

  • Employers must report all newly hired and rehired employees to the Alabama Department of Labor within 7 days of the employee’s first day of work. This reporting helps enforce child support orders and prevent unemployment insurance fraud.

  • Independent contractors are not required to be reported under Alabama’s new hire reporting program.