1. Find your income exemptions
2. Find your pretax deductions, including 401K, flexible account contributions ... 3. Find your gross income 4. Check the 2016 Alabama state tax rate and the rules to calculate state income tax 5. Calculate your state income tax step by step 6. If you want to simplify payroll tax calculations, you can download ezPaycheck payroll software, which can calculate federal tax, state tax, Medicare tax, Social Security Tax and other taxes for you automatically. You can try it free for 30 days, with no obligation and no credt card needed. Learn more about the in house payroll tax solution for Alabama small businesses here. |
ezPaycheck: Small Business Payroll Solution |

IRS released the new 2018 tax tables on Jan 11, 2018. Employers should implement the 2018 withholding tables as soon as possible, but not later than February 15, 2018.

Current ezPaycheck software clients and ezAccounting software clients can download the latest version for free to update 2018 tax tables.

## Tax rate used in calculating Alabama state tax for year 2016
## Need a Better Way to Calculate Alabama State Income Tax Withholdings?Click here to view the step by step guide on
- Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
- Subtract the nontaxable biweekly Federal Health Benefits Plan payment (s) (includes dental and vision insurance program, and flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
- Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
- Multiply the adjusted gross biweekly wages times >26< to obtain the gross annual wages.
- Determine the personal exemption by applying the following guideline and subtract this amount from the gross wages to compute the taxable income.
**Tax Withholding Table** Zero or Single (Filing Status S)**If the Amount of** Taxable Income Is:**The Standard Deduction** Amount Is:Over: **But Not** Over:
- Calculate the Federal Tax Deduction based on the actual amount of federal tax withheld this payroll period multiplied by>26.<
- Determine the personal exemption allowance based on the employee's marital status using the following table.
- Calculate the Dependent Exemption by multiplying the number of exemptions claimed by one of the following amounts based on the employee's annualized wages.
- If the employee is claiming "0" (ZERO), SINGLE, MARRIED FILING SEPARATELY or HEAD OF HOUSEHOLD, apply the following tax rate the annualized taxable wages to determine the annual amount.
- If the employee is claiming MARRIED, apply the following tax rate the annualized taxable wages to determine the annual amount.
11. Divide the annual Alabama tax withholding by >26< to obtain the biweekly Alabama tax withholding.
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