Alabama Nanny Tax Guide
Alabama exempts domestic help in a private home from state income tax withholding. Household employers don't withhold Alabama state income tax from their nanny's paycheck, though the nanny remains responsible for any income tax they owe at year-end. Employer-side SUI is still required.
Alabama household employer quick facts
Minimum Wage
$7.25/hour (federal)
SUTA Rate Range
0.65% - 6.8%
- No state income tax withholding for domestic workers
- Uses federal minimum wage
- No state disability insurance requirement
- Employer SUI still required on the first $8,000 in wages
Alabama Employer Requirements
State Income Tax (Exempt)
Alabama DOR guidance and Ala. Admin. Code 810-3-71-.02 list domestic help in the home as exempt from withholding tax regulations. Your nanny is responsible for paying any Alabama income tax they owe when they file their return.
State Unemployment Insurance
Employers pay SUI tax on the first $8,000 of wages. New employer rate is 2.7%, with rates ranging from 0.65% to 6.8% based on experience.
Local Taxes
Birmingham and some other cities have occupational taxes. Birmingham's rate is 1%. Check if your employee works in a locality with additional taxes.
What will it cost?
Wondering what you'll actually owe as a Alabama employer? Adjust the numbers below to get a quick estimate of your annual tax obligations.
This guide is for informational purposes only and should not be considered legal or tax advice. Tax laws change frequently. Always verify current requirements with your state's tax agency or consult with a qualified tax professional.
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