Alabama has relatively low income taxes, but if you’re wondering where your paycheck goes the furthest in the Yellowhammer State — wonder no more.
SmartAsset, a financial technology company, recently calculated the most paycheck-friendly places in the state, and ranked each county based on four financial criteria: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
Basically paycheck friendliness is how much of a paycheck a worker gets to keep after taxes are paid and required purchases are made, combined with prospects for future growth and job security.
“Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make,” said SmartAsset.
The Heart of Dixie has a variable income tax rate, in which the amount of tax withheld depends on which of three tax brackets you fall under. This generally means that you’ll be taxed more if you earn more.
Residents of Alabama usually have their federal tax, along with their state tax, withheld from each paycheck. Depending on which county you live in, local income taxes are also withheld.
- Shelby County, Ala.
- Madison County, Ala.
- Limestone County, Ala.
- Tuscaloosa County, Ala.
- Elmore County, Ala.
- Saint Clair County, Ala.
- Henry County, Ala.
- Bullock County, Ala.
- Autauga County, Ala.
- Lee County, Ala.
Alabama paycheck quick facts:
- State income tax rate: 2 percent – 5 percent
- Median household income: $42,830 in 2014 (US Census Bureau)
- Number of cities with local income taxes: 4