AlabamaSalary Calculator 2026 — Take-Home Pay After Federal & State Taxes

Alabama uses a three-bracket progressive income tax system with rates of 2%, 4%, and 5%. The top rate of 5% applies to taxable income over $3,001 for single filers — a low threshold that puts most workers in the top bracket quickly. Alabama allows a federal income tax deduction on the state return, which meaningfully reduces taxable income for higher earners and is one of the few states with this deduction. The state does not have a standard deduction equivalent to the federal one. Alabama also has a 6.25% average local sales tax, which is among the highest in the country — so lower income tax is partially offset at the register. Workers in Birmingham and Huntsville should note no local income taxes apply in most Alabama cities.