Overtime Pay Calculator — Alabama (2026)
Overtime in Alabama starts with the federal FLSA floor: 1.5× your regular rate for every hour beyond 40 in a workweek. Some states add daily overtime or double-time rules on top. This calculator shows gross overtime pay and what survives federal, FICA and Alabama taxation in 2026. Alabama uses a progressive income tax with 3 brackets running from 2.00% up to 5.00%, applied after a state standard deduction of $3,000.
Alabama Overtime Pay Calculator
Your base pay per hour.
Hours beyond 40 in the workweek.
Overtime rules that apply in Alabama
Alabama follows the federal weekly standard: overtime is owed after 40 hours in a workweek, with no general daily overtime requirement.
The "regular rate" is not just your base hourly wage — non-discretionary bonuses, shift differentials and commissions must be folded in before multiplying by 1.5, which raises the true overtime rate for many healthcare workers around Birmingham.
Is overtime taxed more in Alabama?
No — overtime is ordinary wages. It can feel over-taxed because per-period withholding tables annualize a big check as if every week looked like that, temporarily withholding at a higher rate that you recover at filing.
The Alabama layer applies to overtime exactly as to base pay, at rates up to 5.00%.
Exempt vs non-exempt in Alabama
Salaried does not mean exempt. To be exempt from overtime a worker must clear both a salary threshold and a duties test; misclassification is one of the most common wage claims filed in Alabama.
Cost of living in Alabama sits 12% below the national average (index 88), median household income is $59,609, and a one-bedroom apartment in Birmingham rents for roughly $1,150 a month.
Local and payroll taxes Alabama adds on top
Alabama adds no state-mandated employee payroll deduction beyond FICA, so nothing extra is taken from your gross pay at the state level.
Several Alabama cities levy occupational taxes (Birmingham 1%, Bessemer 1%).
Overtime hours carry exactly the same local withholding as regular Alabama hours; the extra pay is taxed at your marginal rates, not at a special penalty rate, even though the deduction line looks bigger.
Working across a state line from Alabama
Alabama has no income-tax reciprocity agreements, so if you live here and work across a state line you generally file a nonresident return in the work state and claim a credit at home to avoid double taxation.
Remote and hybrid work complicates this further: most states tax income where the work is physically performed, so a Birmingham resident spending part of the year at a client site in Tennessee may owe a nonresident return there. Keep a day-count log if you split time between states.
The rest of your Alabama tax bill
Alabama charges a 4% state sales tax, homeowners pay an average effective property tax of 0.39% of market value, and the minimum wage in force during 2026 is $7.25 an hour.
Local rates push combined sales tax to about 9.3% on average.
Income tax is only one part of a state's take. Alabama recovers revenue through sales and property tax as well, which is why headline income tax rates alone are a poor guide to how far a salary really goes. Alabama exempts Social Security and most defined-benefit pensions, but taxes 401(k) and IRA withdrawals above a $6,000 exclusion for filers 65+.
Alabama vs Tennessee on the same salary
On a $75,000 salary, a single filer keeps about $58,033 a year in Alabama against roughly $61,593 in Tennessee — a difference of $3,560, or $297 a month.
Effective combined rates are 22.6% in Alabama and 17.9% in Tennessee. Set that gap against living costs: index 88 here versus 91 there, with property tax at 0.39% and 0.66% respectively.
Alabama income tax brackets 2026 (single filer)
| Taxable income | Rate |
|---|---|
| $0 – $500 | 2.00% |
| $500 – $3,000 | 4.00% |
| $3,000 and up | 5.00% |