Alabama New Employer Information
Congratulations on your decision to become a new employer in Alabama! You will need the following things in place before you run your first payroll.
For help registering your business in Alabama, check out our partner, CorpNet.
Federal and State Tax Accounts
Federal Tax Accounts:
- Although it is not required, we recommend you enroll in the Electronic Federal Tax Payment System (EFTPS). You can easily register online. You will need to have this account to make tax payments online, or view payments made on your behalf by Patriot.
- To find out more about EFTPS, please read our article, “What Is EFTPS?”
State of Alabama Tax Accounts:
- Alabama new employers need to register with the Department of Revenue for a withholding tax account number for state income taxes (SIT).
- You will need to file for the Combined Registration/Application available online. You will be directed to the My Alabama Taxes website. Click “Register a business/Obtain a new tax account number” if you have not already set one up. It will take 3-5 business days to obtain your account number.
- New employers in Alabama need to register with the Alabama Department of Labor for a state unemployment insurance (SUI) tax account number.
- You can register online.
- Alabama has many local income taxes. You will need to register with your local government if you do business in any of these localities: Attalla, Auburn, Bear Creek, Beaverton, Bessemer, Birmingham, Brilliant, Fairfield, Gadsden, Glencoe, Goodwater, Guin, Haleyville, Hamilton, Leeds, Lynn, Macon County, Midfield, Mosses, Opelika, Rainbow City, Red Bay, Shorter, Southside, Sulligent, Tarrant, and Tuskegee.
State-mandated Insurance:
- You must have workers’ comp insurance if you have 5 or more employees in Alabama. You can sign up for workers’ comp insurance through a private provider or state-operated fund. Learn more about workers’ comp requirements in Alabama here.
- Patriot’s online payroll offers free pay as you go (PAYG) workers’ comp integration with our partner, NEXT Insurance. You can get a free quote with NEXT here.
Setting Up Your New Employee:
- Fill out the required Form I-9. This is a two-part form. The first section is to be filled out by the employee and the second section will be filled out by the employer. For more information, please read “Form I-9 In a Nutshell”
- You must retain each employee’s completed Form I-9 as long as the individual works for you. For more information, please read “What Should Be in an Employee File?”
- Be sure you have met the minimum wage requirements for the federal government. Alabama follows the federal minimum wage rate of $7.25 per hour.
- By law, employers need to display the minimum wage poster for employees where they can read it.
Once you have all the necessary information, you will be able to set up your payroll for your business.
You will be required to keep employee payroll records for at least three years. For more information, please read our help article, “What Employers Should Know About Employee Payroll Records”
Let us know if you have any questions. We are here to help!
This is not an all-inclusive list for new employers. Please check with your state and federal government for full compliance.
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