Birmingham Local Tax Guide (2026)
Understanding how local taxes work in Birmingham, Alabama, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Birmingham has a local income tax that applies to income earned in the city.
- •Residents pay 1.00% on all income.
- •Local tax is separate from Alabama state tax and federal tax. Both are calculated independently and add to your total tax burden.
- •Local tax directly reduces your take-home pay. Combined with state and federal taxes, the total tax burden can be significant for high earners.
What Birmingham local tax costs at three incomes
The 1.00% resident rate is charged on top of federal tax, Alabama state tax and FICA. Priced for 2026, a $75,000 salary loses $750 to Birmingham alone and takes home $57,283: a combined 23.6% of gross across all four.
| Salary | Birmingham tax | Alabama tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $500 | $2,310 | $7,645 | $39,545 | 20.9% |
| $75,000 | $750 | $3,560 | $13,408 | $57,283 | 23.6% |
| $120,000 | $1,200 | $5,810 | $26,750 | $86,240 | 28.1% |
How Birmingham compares
Of the 62 US jurisdictions that levy a local income tax, Birmingham ranks 54th by resident rate, level with 7 other jurisdictions. The median is 2.50%, the highest is New York City at 3.078%–3.876%, and the lowest is St. Louis at 1.00%. Immediately above Birmingham sits Bessemer (1.00%) and below it Flint (1.00%).
Within Alabama, 3 jurisdictions charge a local income tax and Birmingham is the 3rd highest. Same salary, different address:
What local taxes apply in Birmingham
Birmingham has a local income tax that applies to income earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 1.00% | All income |
Birmingham has a local income tax that applies to income earned in the city. The rate depends on whether you're a resident or non-resident.
Birmingham has a local income tax that applies to income earned in the city.
Residents: If you live in Birmingham, you pay 1.00% on all your income.
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How they interact with state taxes
Birmingham local tax is calculated separately from Alabama state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
Birmingham local tax is calculated separately from Alabama state income tax. This means:
- Local tax is in addition to state tax, not instead of it
- Both taxes are calculated on your taxable income (or wages, depending on the tax type)
- Your employer withholds both local and state taxes from your paycheck
- You may be able to deduct local tax on your state tax return, depending on Alabama tax rules
For example, if you earn $100,000 in Birmingham, you pay Alabama state tax on that income, plus Birmingham local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Birmingham local tax if you live in the city or work in the city, depending on whether you're a resident or non-resident.
You're subject to Birmingham local tax if:
- You live in Birmingham (residents pay on all income)
- You're self-employed and perform work in Birmingham
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Common paycheck misconceptions
Common misunderstandings about Birmingham local tax, including when it applies and how it's calculated.
Common misconceptions about Birmingham local tax:
- "It's the same as state tax": False. Local tax is separate from Alabama state tax and is calculated independently.
- "I only pay if I live there": True for residents, but check if non-residents are subject to tax.
- "Remote work means no tax": If you're a Birmingham resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Birmingham local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Birmingham local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Birmingham resident:
- Local tax: approximately $1000 annually
- This reduces your bi-weekly paycheck by about $38
- Combined with Alabama state tax and federal tax, the total tax burden can be significant
To see exactly how Birmingham local tax affects your paycheck, use our calculator above. You can adjust your income, filing status, and deductions to see how different scenarios affect your net pay.
Want to see this with your numbers? Try the calculator with your numbers →
Does this apply to you?
Determine whether you're subject to Birmingham local tax based on where you live and work.
Check Your Pay Stub
You're subject to Birmingham local tax if:
- You live in Birmingham (residents pay on all income)
You're not subject to Birmingham local tax if you live and work outside the city, even if you're a Alabama resident.