Does Alabama tax overtime pay?

Alabama temporarily exempted overtime wages from state income tax, but that exemption expired on June 30, 2025. For 2026, overtime is again subject to the standard 2% to 5% Alabama withholding, though it remains exempt from federal tax under the new federal overtime deduction.

What is the minimum wage in Alabama for 2026?

Alabama has no state minimum wage law, so the federal rate of $7.25 per hour applies statewide. The state also prohibits cities from setting their own higher local minimums.

Is a generated paystub legal in Alabama?

Yes, as long as the information provided is accurate and reflects real wages or contractor payments. A generated paystub is best used as an organized personal or business record, while formal applications may still require official employer, bank, or tax documents.

How do I calculate Alabama state taxes?

Our generator automatically applies the current 2026 Alabama state income tax rates based on your gross pay and filing status. You don't need to do the math manually. We update our tax tables annually to match the latest Dept of Revenue guidelines.

Can I use this for a 1099 contractor in Alabama?

Absolutely. While 1099 contractors are not employees, they often need organized income records. You can generate a "check stub" style document or a remittance advice slip using our generator to summarize payments received.

Alabama Paystub Generator — 2026 Tax Rates

Alabama Paystub Generator — Create professional paystubs with accurate local tax calculations. 50+ templates, instant PDF download. Free to preview, no signup required.

Alabama Payroll Facts (2026)

Minimum wage: $7.25/hour
State income tax: 2% - 5%
Pay stub requirement: Alabama does not require employers to provide pay stubs, but it is recommended for record-keeping.

Example: Take-Home Pay on a $60,000 Salary in Alabama

A single filer earning $60,000 per year in Alabama takes home about $47,390 after taxes — federal income tax $5,020, state income tax $3,000, Social Security $3,720, and Medicare $870 — an effective tax rate of 21.0%. Use the generator above for your exact pay and frequency.

Alabama Pay Statement Rules

Alabama has no statute compelling private employers to issue a detached pay stub, and it has not adopted a state Wage Payment and Collection Act. Recordkeeping is instead governed federally by the Fair Labor Standards Act (29 CFR 516), which requires employers to retain wage, hour, and deduction records for three years. Most Birmingham, Montgomery, and Mobile employers voluntarily provide itemized stubs because employees rely on them as proof of income for mortgages, auto loans, and apartment applications.

Alabama Income Tax and Withholding

Alabama levies a graduated state income tax topping out at 5%, with the first dollars of taxable income taxed at 2% and 4% before reaching the top bracket. Employers withhold based on the employee Form A-4. Alabama is one of the few states that still allows a full federal income tax deduction on the state return, which lowers effective withholding. The state minimum wage defaults to the federal $7.25 per hour because Alabama has not enacted its own rate.

Frequently Asked Questions

Does Alabama tax overtime pay?: Alabama temporarily exempted overtime wages from state income tax, but that exemption expired on June 30, 2025. For 2026, overtime is again subject to the standard 2% to 5% Alabama withholding, though it remains exempt from federal tax under the new federal overtime deduction.
What is the minimum wage in Alabama for 2026?: Alabama has no state minimum wage law, so the federal rate of $7.25 per hour applies statewide. The state also prohibits cities from setting their own higher local minimums.
Is a generated paystub legal in Alabama?: Yes, as long as the information provided is accurate and reflects real wages or contractor payments. A generated paystub is best used as an organized personal or business record, while formal applications may still require official employer, bank, or tax documents.
How do I calculate Alabama state taxes?: Our generator automatically applies the current 2026 Alabama state income tax rates based on your gross pay and filing status. You don't need to do the math manually. We update our tax tables annually to match the latest Dept of Revenue guidelines.
Can I use this for a 1099 contractor in Alabama?: Absolutely. While 1099 contractors are not employees, they often need organized income records. You can generate a "check stub" style document or a remittance advice slip using our generator to summarize payments received.

How to Create a Alabama Paystub Generator

Enter Employer Info: Fill in your company name, address, and contact information.
Enter Employee Details: Add the employee name, address, and employment information. State and local tax rates are applied automatically.
Enter Pay Period: Specify the pay period dates, pay frequency, and earnings. Federal, state, and FICA taxes are calculated for you.
Review & Download: Preview your paystub for free, then download a professional PDF instantly.