Payroll and Benefits Guide - United States -Alabama

United States -Alabama
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Currency

United States Dollar (USD)
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Capital

Montgomery
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Employer Taxes

11.60% – 23.15%
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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Alabama is known for its diverse wildlife, including the endangered Red Hills Salamander, which is found only in a few counties of the state.

The state of Alabama is known as the “Heart of Dixie.”

The Alabama Shakespeare Festival, located in Montgomery, is one of the largest Shakespeare festivals in the world.

Alabama is home to several beautiful natural landmarks, including the Gulf Shores, Little River Canyon National Preserve, and Bankhead National Forest.

Alabama became the 22nd state of the United States on December 14, 1819.

The official state nickname of Alabama is the “Yellowhammer State.”

United-States-Alabama

Contributions

Employee Payroll Tax

Contribution TypeRate
FICA Social Security (Federal)6.20% (Maximum taxable wages 160,200.00 USD)
FICA Medicare (Federal)1.45%
(Additional tax on earnings over 200,000 USD) (High-income earners also pay an additional 0.9 percent in Medicare taxes)1.45%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance (State)0.20%- 6.80% * includes 0.6% stabilization Tax
Unemployment- New Employer (State)2.70%
FICA Social Security (Federal)6.20%
FICA Medicare (Federal)11.45%
UTA (Federal Unemployment Tax Act)0.60-6.00%

Payroll

Payroll Cycle

Employees are generally paid monthly or semi-monthly.

13th Salary

There are no provisions in the law regarding 13th salaries.

Work Hours and Week

In Alabama, the workweek is a maximum of 40 hours per week or 8 hours per day.

Overtime

Alabama adheres to the Fair Labour Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay.
United-States-Alabama

Leave

Paid Time Off

Alabama does not have any state laws that govern paid time off. However, it is common for employers to decide whether to offer paid or unpaid vacation leave.

Public Holidays

There are 12 public holidays in Alabama.

Sick Days

Alabama does not have any state statute governing the amount and payment of absences.

Maternity Leave

Maternity leave may fall under Family and Medical Leave Act (FMLA)

Paternity Leave

Paternity leave may fall under FMLA

Parental Leave

Paternity leave may fall under FMLA

Termination

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated “at will.”

Notice Period

In Alabama, most employees are employed “at-will,” and either party can terminate the employment relationship without notice.

Severance Pay

Except as otherwise provided in an employment contract or collective bargaining agreement, employers are not required to pay severance. Many employers choose to offer severance pay based on the length of employment.

Probation Period

Probation Period

There are no provisions in the law regarding probation or trial periods. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

VISA

VISA

There are no provisions in the law regarding probation or trial periods. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

VAT

In the US, there are 38 states where there is a combined state and local tax rate.

Alabama is one of the top five states with the highest combined state and local tax rate of up to 13% (state rate is 4.00% and local rate is between 0 and 9%).