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Paying employees in Alabama
When hiring employees in new states, you will need to register for relevant state tax accounts to facilitate their payment. In Alabama, you must be registered with the Alabama Department of Revenue (income tax withholding), Alabama Department of Labor (unemployment tax) and, if applicable, Local Alabama tax agencies.
Alternatively, Justworks Payroll can handle the registration process for you. We offer state tax registration services to assist with registering your business in new states. To request registration, please contact us at support@payroll.justworks.com.
Your Alabama Accounts and Rate Info
Registering for a Withholding Tax Account:
Before obtaining a withholding-specific tax account number, employers must first open a general employer tax account with the state. To register online with the Alabama Department of Revenue:
- Visit the Alabama Department of Revenue website.
- Scroll down to the “Businesses” section.
- Click on "Register a business/Obtain a New Tax Account Number."
- Follow the remaining steps to complete the registration. If you have any questions, contact the agency directly.
Once your general tax account is open, you can obtain your withholding tax account number. After completing registration, it typically takes 3–5 days to receive your withholding account number.
For detailed instructions:
- Visit the My Alabama Taxes help page to learn how to register for specific tax types.
- Go to the main My Alabama Taxes (MAT) page.
- Scroll to the "Businesses" section and click "Register a business/Obtain a new tax account number."
- Review the "Before you begin" information.
- Scroll down to enter your company ID information or sign in as an existing taxpayer.
- Follow the remaining prompts to ensure you open a withholding account.
If you have questions, you can reach the withholding tax department at (334) 242-1170, option 5.
Registering for an Unemployment Tax Account with the Alabama Department of Labor (DOL):
To obtain your Alabama Unemployment tax account number and rate, register online with the Department of Labor. You'll need the following information to get started:
After completing the registration, you'll receive your unemployment account number instantly online, along with your company-specific unemployment tax rate.
Registering for Local Tax Accounts:
Certain municipalities in AL require you to pay local taxes. If you owe taxes in any of the following areas, you must register with Alabama Avenu Insights/Revenue Discovery Systems (RDS):
- Attalla
- Beaverton
- Birmingham
- Fort Deposit
- Guin
- Haleyville
- Hamilton
- Leeds
- Macon (county)
- Midfield
- Mosses
- Notasulga
- Shorter
- Southside
- Sulligent
- Tarrant
- Tuskegee
To register, visit the Alabama Avenu Insights/Revenue Discovery Systems (RDS) website to register. You’ll need to request an “Authority Account Number,” which is required for Justworks Payroll to file on your behalf. If you have any questions, contact Avenu/RDS directly at (800) 556-7274.
Auburn Tax Account Registration:
If your business operates in Auburn, you must obtain an Auburn tax account number. To do this:
- Download and complete a Business Registration Form.
- Submit the completed form by mail.
- For any questions, contact the City of Auburn at (334) 501-7226.
Birmingham Occupational Tax:
All employees working in Birmingham are required to pay the Birmingham Occupational Tax.
If your business is based in Birmingham, you must obtain a Birmingham tax account number. To get started:
- Register online here.
- Request an "Authority Account Number," which Justworks Payroll needs to file on your behalf.
- If you have any questions, contact the agency directly at (205) 254-2198.
Gadsden Customer Number:
If your business operates in Gadsden, you must obtain a Gadsden Customer Number. Here’s how to do it:
- Begin the registration process online.
- Download and complete a Business License Application.
- Submit the application by mail to receive your Gadsden tax account number.
- For more information, contact the City of Gadsden Revenue Department at (256) 549-4562.
Already Registered? Locate This Information
Locate Your Withholding Tax Account Number:
If you've previously processed payroll in Alabama, you can find your withholding tax account number on:
- Withholding tax coupons, or
- Form A-1 (The Return of Income Tax Withheld).
If you're unsure of your account number, contact the agency at (334) 242-1584.
Locate Your Unemployment Account Number and Rate:
You can find your unemployment account number and rate by:
- Signing in to your eGov account (if you're not a new employer with the initial 2.7% rate).
- Reviewing Form UC-216F (Tax Rate Notice), or
- Reviewing Form UC-CR4 (Quarterly Contribution and Wage Report).
For questions about your account number, email status@labor.alabama.gov or call (334) 954-4730. For questions about your rate, email experiencerating@labor.alabama.gov or call (334) 954-4741.
Entering State Tax Info in Justworks Payroll
Once you registered with the State and have a valid AL address added to your company’s offices, you can add your account info in Justworks Payroll by navigating to:
- Company > Settings in the left navigation bar
- Under ‘Company tax info’ click into “Alabama” to edit the state tax information
In your Justworks Payroll account, you’ll want to enter your AL Withholding Tax Account Number, Unemployment Account Number and Tax Rate, and, if applicable, any local tax account information.
Third-party admin access
As your payroll provider, Justworks Payroll will utilize the provided account information to manage and report your AL tax liabilities. Occasionally, the state may issue notices related to payroll taxes.
Justworks Payroll can examine these notices if granted Third-party admin access to your AL state tax account. During onboarding, we will request that you sign state specific TPA forms, which authorizes us to handle and report your taxes to the state.
Why is this important?
Justworks Payroll calculates tax liabilities as part of payroll processing. If we cannot access your AL state tax accounts, we must return any unremitted tax liabilities to your company bank account, requiring you to remit and file your company’s state taxes manually.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.