As an employer who has recently hired an employee in Alabama, it is important to understand the process of payroll tax registration. In Alabama, employers are required to register for payroll taxes with the Alabama Department of Revenue to ensure compliance with state tax laws and facilitate the proper withholding and remittance of taxes from employee wages.
How Alabama Payroll Registration Works
There are 2 payroll tax setup tasks you may need to complete in Alabama to get your new hire on payroll for the first time. You can follow the guide below to help you get registered directly with the Alabama agencies or use Mosey to do it.
Alabama Withholding Tax Setup
If you have Alabama employees, you must register for a withholding tax account with the Department of Revenue.
Register Your Business
Visit MAT and select “Register a business/Obtain a new tax account number” to set up an Alabama tax account.
Add Withholding Information to Your Payroll Provider
Add your account number and withholding schedule to your payroll provider when you receive them.
Alabama Unemployment Compensation Setup
During the current or preceding calendar year, if you have: (a) At least one employee on some day in 20 different weeks, whether or not consecutive, or (b) Paid wages of $1,500 or more in any calendar quarter, you must register with the Department of Labor for an Unemployment Tax account.
Register for an eGov Account
Visit the Department of Labor eGov login page to register for an eGov Account in order to access employer online services.
Register for an Unemployment Tax Account
Log into your eGov account and submit an online Application for Liability (Form SR-2) to register for an Unemployment Tax Account.
Add Unemployment Tax to your Payroll Provider
Once you have your EAN and Unemployment Compensation tax rate, add them to your payroll provider.