State withholding tax rates
Hello, I have question with regards to the state withholding tax rates. I am reading the table and for example the state of Alabama’s rate is from 0.65 to 6.8% with a maximum taxable income of $8000. My question is how do I know what the actual rate to be used must be – it is somewhere between 0.65 – 6.8% percent but what determines what actual rate must be used? Any help would be greatly appreciate. Thank you.
State tax withholding rates vary based on the status of the worker, i.e. single, married, and number of exemptions, for example. Most payroll software has the rate tables built in.
If you have only one employee, Gusto can run your payroll for as little as $45/month plus $6 for every employee after that. There’s also free payroll software that manages state tax withholdings for you.
Consider these options:
Here are the instructions for Alabama, in particular: https://revenue.alabama.gov/wp-content/uploads/2017/07/whbooklet_0317.pdf
And here is a link where you can find the complete tax tables for Alabama. https://revenue.alabama.gov/individual-corporate/taxes-administered-by-individual-corporate-income-tax/withholding-tax/
Laura, HR Staff Writer