Struggling to keep up with payroll and HR in Alabama? From local ordinances to statewide labor laws, we’ll help you save time and focus on growing your business.
Payroll services in Alabama
How Paylocity helps Alabama employers
Payroll that gets it done
- Seamless automation: Eliminate repetitive tasks with automated workflows that boost accuracy and save time.
- Smart safeguards: Built-in audits and integrations flag issues before they become errors.
- Transparent calculations: Easily manage overtime, bonuses, and local tax changes, even across overlapping jurisdictions.
Your extra HR team member
- Automated workflows: Use ready-made templates for common tasks or build custom processes that fit your business.
- One employee record: A single source of truth for employee data keeps everything organized and compliant.
- Effortless Time & Labor: Schedule quickly, track clock-ins and meal breaks, and standardize time-off requests.
Compliance made simple
- Compliance dashboard: Get a clear view of requirements with updated forms and expert HR support.
- Built-in data access: Quickly find work authorizations, EEO/FLSA data, pay records, certifications, and industry updates.
- Always up-to-date forms: Access the latest state and federal forms right from the platform.
Challenges facing employers in Alabama
Alabama maintains a complex compliance landscape that requires a careful balance between federal standards and state mandates.
As an employer, you must grapple with:
- Stricter employment regulations regarding pay equity.
- Dozens of local occupational taxes across various cities and municipalities.
- State-based limitations on non-compete agreements.
Alabama payroll fast facts
Minimum wage
$7.25*
State income tax rate
2.00% - 5.00%
Right to work laws
Yes
State unemployment tax rate
- 2.70% (new employers)
- 0.20% - 5.40% (experienced employers)
*This state has no minimum wage law and defers to federal rates.
Last updated: February 23, 2026
Alabama tax and compliance resources
FAQs about paying employees in Alabama
Does Alabama have a state income tax?
Yes, Alabama’s income tax is progressive, ranging from 2.00% - 5.00% based on the taxpayer's level of income.
Is Alabama a right to work state?
Yes, Alabama is a right to work state under Article 1 §36.05 of its state constitution.
What are the Alabama final pay laws?
Alabama currently has no final paycheck laws or regulations.
Are there Alabama work break laws?
No, Alabama currently has no laws regarding work breaks.
More than just payroll
Why employers in Alabama choose Paylocity
Credit union banks on a modern HR and payroll solution
As one of the oldest credit unions in Alabama, Avadian needed a modern payroll and HR platform to keep up with its growing needs.
