Updated September 7, 2023
What we'll cover:
- What information OnPay needs from you
- What state and local taxes and filings OnPay handles for Alabama employers
- Where you can find the tax account numbers needed
- Paying employees in other states?
Why is this important?
For employers who pay employees in Alabama, the state will require state income tax. Use this guide to learn what’s required to start running payroll while keeping compliant with state payroll tax regulations. Click on the topic below to learn more.
What information OnPay needs from you
Use this checklist to make sure you’ve covered everything required to set up your account as a Alabama employer so OnPay can accurately file and pay taxes on your behalf:
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✔ |
To do: |
What is this? |
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Make sure your business is registered with the Alabama Department of Revenue |
Allows your business to file and pay withholding taxes in Alabama |
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Make sure your business is registered with the Alabama Department of Labor |
Allows your business to pay required unemployment insurance in Alabama |
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Provide OnPay with your Alabama State Withholding ID and deposit schedule |
The employer identification number issued by the Alabama Department of Revenue (Ex: R000123456) |
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Provide OnPay with your E-File Sign-On ID, E-File Access Code |
Allows OnPay to file and pay taxes on your behalf in Alabama. |
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Provide OnPay with your Alabama Unemployment Account Number |
A 10-digit number unique to your account with the Alabama Department of Labor. |
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Provide OnPay with your Alabama Unemployment (SUI) Rate and Alabama Employment Security Assessment Rate (ESA) Rate |
A tax rate you receive annually from the Alabama Department of Labor. |
What state and local taxes and filings OnPay handles for Alabama employers
OnPay handles the filing of all state and local taxes for businesses in Alabama, including:
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Type of Tax |
Form ID |
Form Name |
Frequency |
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Withholding
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Form A-6 |
Employer’s Monthly Return of Income Tax Withheld |
Monthly |
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Form A-1 |
Employer’s Quarterly Return of Income Tax Withheld |
Quarterly |
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Form A-3 & W-2s |
Annual Reconciliation of Alabama Income Tax Withheld filed with state W-2s |
Annual |
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Unemployment |
Forms UC-CR-4 and UC-10-R |
Alabama Quarterly Contribution and Wage Report |
Quarterly |
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Other |
New Hire Report |
Alabama New Hire Reporting Form |
As required |
Local Taxes:
All city and county rates are those given to the League by survey and should be verified with the appropriate entity for updates.
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Attalla 2% Auburn 1% Bear Creek 1% Beaverton 1% Bessemer 1% Birmingham 1% Brilliant 1% Fairfield 1% Gadsden 2% Glencoe 2% |
Goodwater 0.75% Guin 1% Hacklebug 1% Haleyville 1% Hamilton 1% Irondale 1% Leeds 1% Lynn 1% Macon County 1% Midfield 1% Mosses 1% |
Opelika 1.5% Rainbow City 2% Red Bay 0.5% Shorter 1% Southside 2% Sulligent 1% Tuskegee 2% |
Where you can find the tax account numbers needed
If you are an existing employer who has previously run payroll in Alabama, you likely already have the IDs and online accounts needed for OnPay to process your tax filings.
If you are a new employer in Alabama, you will need to register your business with the Alabama Department of Revenue and the Alabama Department of Labor. This must be completed for OnPay to be able to file and pay your Alabama taxes.
Withholding Tax Account Number and E-File Sign-On ID/Access Password:
Existing Alabama Employer:
- You can find your Withholding Tax Account Number and your E-File Sign-On ID and Access Code on the notification letter you received from the Alabama Department of Revenue.
- If you have misplaced this letter, please get in touch with the Alabama Department of Revenue at (334) 242-1300 for withholding tax assistance.
New Alabama Employer: Register with the Alabama Department of Revenue
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- Click here and follow the instructions for registering your business
- Note: You must have already registered with the Alabama Secretary of State. For more information on registering with the Secretary of State please call 334-242-5324.
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Once you register online through the Department of Revenue, you will receive a letter in the mail in 3-5 business days with the following information:
- Alabama Withholding Tax Account Number
- E-File Sign-On ID
- E-File Access Code
- TPA Password
Unemployment Account Number, Unemployment Tax Rate, and Alabama Employment Security Assessment Rate (ESA) Rate
Existing Alabama Employer:
- You can find your Unemployment Account Number on the Tax Rate Notice (Form UC-216F) or Quarterly Contribution and Wage Report (Form UC-CR4).
- Your unemployment tax rate can be found in Box 6 of the Tax Rate Notice. New employers generally have a rate of 2.7% for SUTA with a wage base of $8,000.
- Your Employment Security Assessment (ESA) rate can be found in box 7 of the Tax Rate Notice.
New Alabama Employer: Register with the Alabama Department of Labor
- Click here and follow the instructions to register your business.
- You will need to register with this department if you have employees that work in Alabama. If your business is located out of the state, but some of your employee's primary work location is in Alabama, you will need to register with this agency.
- Note: Employers are not required to register with the Alabama Department of Labor until you have paid $1,500.00 in wages during a calendar quarter, or had at least one employee working 20 or more different weeks during a calendar year.
Paying employees in other states?
If you operate in multiple states or just have employees working from home across a state line, it's important to file the correct state forms for those workers. See what forms we file in the states where you pay employees.
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