Alabama Employee Cost Calculator (2026)
Last updated: October 2026
Alabama employers pay federal payroll taxes plus Alabama unemployment insurance — 2.7% for new employers on the first $8,000.00 of each employee's wages. Use the calculator to see the total cost of a hire.
Total annual cost
$64,998.00
1.08× salary · $4,998.00 on top of wages
Monthly cost
$5,416.50
Loaded hourly cost
$31.25
Per hour actually worked
$32.50
| Wages | $60,000.00 |
| Social Security (6.2%) | $3,720.00 |
| Medicare (1.45%) | $870.00 |
| FUTA (federal unemployment) | $42.00 |
| State unemployment (SUTA) | $216.00 |
| Workers' comp | $150.00 |
| Total annual cost | $64,998.00 |
Estimates for planning purposes only. Not tax, legal or accounting advice. Confirm your rates with your state agency or a payroll professional.
Alabama employer payroll taxes at a glance
| New employer SUTA rate | 2.7%Experienced rates range 0.2%–6.8% including the 0.06% Employment Security Assessment. |
| Experienced employer SUTA range | 0.2% – 6.8% |
| SUTA taxable wage base | $8,000.00 |
| Max SUTA per employee per year | $216.00 |
| Paid family/medical leave program | No |
| State income tax on wages | Yes — employers withhold; not an employer cost |
| Source | Alabama unemployment insurance agencyVerified 2026-10-11 |
What it costs to hire in Alabama
Salary
$40,000.00
Total annual cost
$50,618.00
1.27× salary · SUTA $216.00
Salary
$60,000.00
Total annual cost
$72,798.00
1.21× salary · SUTA $216.00
Salary
$90,000.00
Total annual cost
$106,068.00
1.18× salary · SUTA $216.00
What's different about hiring in Alabama
- Alabama's SUTA wage base is low ($8,000.00), so unemployment tax is mostly paid in the first months of the year.
- Hiring remotely in another state? You generally owe SUTA in the state where the employee works — compare rates in neighboring states below.
Compare neighboring states
| State | New employer rate | Wage base | Max SUTA per employee |
|---|---|---|---|
| Alabama | 2.7% | $8,000.00 | $216.00 |
| Tennessee | 2.7% | $7,000.00 | $189.00 |
| Georgia | 2.7% | $9,500.00 | $256.50 |
| Florida | 2.7% | $7,000.00 | $189.00 |
| Mississippi | 1% | $14,000.00 | $140.00 |
Hiring outside the US?
Compare the cost of an international contractor or EOR employee before you commit to a US hire.
See how Deel worksPaying vendors and contractors?
Automate accounts payable and payments so contractor costs stay predictable.
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Sources & methodology
- Alabama unemployment insurance agency
- SSA — Social Security wage base
- IRS Topic 759 — FUTA
- Patriot Software — state unemployment tax rate chart
Last verified: 2026-10-11
Employee cost calculators for other states
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Tax rates are approximate — always verify with your state's revenue department.