Alabama payroll tax and registration guide

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?

The following information requests and registration instructions are required before you can use a payroll provider to run payroll. This is in compliance with state payroll tax regulations. Without this information, OnPay is unable to file or deposit any tax payments for your company, and will not be responsible for any resulting penalties or interest. Note: If this isn't the only state where you have employees, there will be a separate guide like this one for each state where you hire and pay workers. 

Let Middesk handle your state tax registrations (and more)

If you'd like help, our partner Middesk makes hiring employees and staying compliant with every state agency simple and easy.

• Register with every state agency to get the tax IDs you need within minutes
• Stay compliant as you grow by managing agency mail and notices in your dashboard
• Manage your government accounts in one place on Middesk's intuitive platform
• Foreign Qualify with the Secretary of State to create payroll tax accounts 

Learn more about Middesk→

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

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 

• Visit the Business Tax Online Registration System and follow the instructions for registering your business. Note: You'll need to have already registered with the Alabama Secretary of State. For more information on registering with the Secretary of State, call 334-242-5324.
• 3-5 days after completing your business tax online registration, you'll receive a letter in the mail 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.

Birmingham occupational tax

If your business has worksites in Birmingham, you'll need to enter your Birmingham Occupational Tax ID in OnPay, and grant us TPA access. We'll show you how→

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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