The information below will guide you through the following:
- Understanding if you should be calculating Alabama taxes
- Deciding which Alabama taxes your company should register for
- Understanding what forms OnPay files
- Registering with the Alabama Tax agencies
- Completing the forms necessary for OnPay to be able to file/pay on your behalf
- Entering necessary information into OnPay
Do you need to register for Alabama Taxes?
- Do you have a business and/or employees residing in the State of Alabama?
- Have you processed payroll in OnPay and have received warnings stating we are missing tax information?
- Have you received an email from an OnPay Tax Agent requesting certain Alabama information?
If you answered yes to any of the questions above, you should continue with the registration and setup steps below.
Which Alabama Agencies should I register for?
- Alabama Department of Revenue: You will need to register with this department if you have employees that both live and work in Alabama, or for any employees that calculate Alabama withholding taxes regardless of there they live/work. if your business is located outside of Alabama, but your employees work or live in Alabama you will likely need to register with this agency.
- Alabama Department of Labor: You will need to register with this department if you have employees that work in Alabama. If your business is located out of the state, but some of your employees primary work location is in Alabama, you will likely need to register with this agency.
OnPay will use both the home address for each employee, plus the worksite assigned to each employee to decide which taxes should be calculated. OnPay uses reciprocity agreements between states to help decide where a certain employee's taxes are calculated according to those addresses.
Alabama Department of Revenue (withholding assistance): 1-(334)-242-1300
- Click here for a guide to registering with the Alabama Department of Revenue
- Register for your Alabama State Tax ID
Alabama Department of Labor (unemployment insurance assistance): 1-(334) 242-8830
- You are not required to register with the Alabama Department of Labor until you have paid $1500.00 in wages during a calendar quarter, or had at least one employee working on some day in 20 or more different weeks during a calendar year. However, if you know that you will reach either of those requirements quickly, we ask that you complete the registration now so we may have everything set up and ready to file/pay your unemployment taxes.
- Click here for the Alabama Department of Labor Form to register your business
- Register for your Alabama Unemployment Tax ID and tax rate by filling out the form using the link above and sending it to the address on the application.
Tax Forms We File
- Form A-6 Monthly (Required for Monthly Deposit Schedule)
- Form A-1 Quarterly (Required for Quarterly Deposit Schedule)
- Form A-3 Annually (Required for all Alabama employers: W'2's and 1099's)
- Forms UC-CR-4 and UC-10-R Alabama Quarterly Contribution and Wage Report
Municipal Occupational Taxes
All city and county rates are those given to the League by survey and should be verified with the appropriate entity for updates.
Bear Creek 1%
Mountain Brook 0%
Rainbow City 2%
Red Bay 0.5%
What information does OnPay need?
This information is required. If OnPay does not receive one or more pieces of the information/steps listed below, we may be unable to file/pay one or more of your tax returns. Please contact us if you have any questions.
Alabama Department of Revenue:
- Alabama State Withholding Account: This account number is 10 characters beginning with a "R". Ex: R123456789
- Withholding deposit frequency requirements (may be updated annually by the Department of Revenue)
- E-File Sign-On ID
- E-File Access Code
- Complete the steps outlined below in Appendix A.
Alabama Department of Labor:
- Alabama Unemployment Account Number (UC Registration Number): a 10-digit ID
- Alabama Unemployment Rate and the Alabama Employment Security Assessment Rate (ESA Rate)
- REQUIRED: We can file and pay your taxes electronically on our Third Party Account by having a Power of Attorney on file with the state. You must complete the Power of Attorney to be added to our account. Please see section "Appendix B: Power of Attorney" for a link to the forms we must have completed.
I am an existing Alabama employer, where do I find the information to provide to OnPay?
If you are an employer with a history of payroll in Alabama you have likely obtained the IDs and online accounts necessary for OnPay to process your tax filings.
Alabama Department of Revenue:
- Withholding Tax Account Number: Existing employers can find their Withholding Tax Account Number on Form A-1, return of income withheld.
- E-File Sign-On ID/Access Code: These are located on the notification letter you received when registering with the Alabama Department of Revenue. If you have any questions about setting up you online account please call the number listed above or reference our Guide for Registering with the Alabama Department of Revenue for assistance.
If you cannot locate this document or account number, please call the Alabama Department of Revenue at 1-334-242-1584 and request the account number.
Alabama Department of Labor:
- Unemployment Account Number: Existing employers can find the Unemployment Account Number on the following forms:
- Tax Rate Notice (Form UC-216F)
- Quarterly Contribution and Wage Report (Form UC-CR4)
- Unemployment Tax Rate: This can be found in Box 6 of the Tax Rate Notice
- Employment Security Assessment: This can be found in box 7 of the Tax Rate Notice
If you cannot locate one of the documents above, or the account number, please contact the Alabama Department of Labor and request the account number.
Where do I enter the information in OnPay?
If you already have your tax information, or if you have obtained it using the steps above, please update the tax information in OnPay:
- Login to OnPay
- Select the Settings menu icon
- Select Payroll Tax
- View/Update your Withholding Tax ID, Withholding Tax Deposit Schedule, Unemployment Tax ID, Unemployment Rate (as a %), and any local tax IDs as required.
Once you have the following information, please email it to email@example.com:
- DOR: E-File Sign-On ID/E-File Access Code
- Completed Alabama DOL POA found here.
Please reference each section below to identify any other information or steps required for OnPay to complete tax payments and filings on your behalf. If you are a new employer in the State of Alabama, the following information can be very useful in helping get your company set up and registered.
Please complete the following steps so we can use the information above to register as your third party with the Alabama Department of Revenue:
First, please log into your Alabama Department of Revenue Online Account:
Depending on which window you are currently viewing, you may need to do one of the following:
- Click the Home hyperlink followed by the View/Edit MAT Profile hyperlink.
- Click the View/Edit MAT Profile hyperlink in the menu bar on the left side of the window
- Click the Manage Logons tab.
- If it is not displayed by default, select the Settings sub-tab.
Note: If you do not see the Settings sub-tab, then you do not have permissions to allow or disallow third-party logons. Only the logon designated as Master has permission to allow or disallow third-party logons.
If Third-Party Logons Allowed/Change Third-Party Password is set to Yes, third-party logons can be created. If it is set to No, they cannot be created.
To Allow Third-Party Logons:
Click the No hyperlink. You will be directed to the Change Third-Party Access page.
In the Would you like to enable others to access your accounts? field, click the blue drop-down arrow and select Yes.
Create a third-party password. The password must be 8-16 characters in length and must contain one letter and one number.
Note: This should be different than the password you use to access your MAT account.
We do not need this password. We will gain access using the account number, E-File Sign-On ID, and the E-File Access Code you provide. We simply need you to ensure Third-Party Logins are allowed.
Appendix B: Power of Attorney
What we need from you as an Alabama Employer:
Please CLICK HERE for the Alabama Power of Attorney forms and information on how to complete the forms. This will allow us to speak on your behalf, file, and make payments with the State of Alabama. Please email the completed Power of Attorney forms firstname.lastname@example.org.
Give us the Info
Once you have received all of this information from both the Department of Revenue and the Department of Labor please forward it on to us at email@example.com.
**If you have liabilities or employees for more than one state please follow the instructions found in the knowledge base for each state.**