Alabama tax burden — broken down.
Alabama’s combined tax burden (income + property + sales) lands at 9.41% on our composite — ranking #36 of 51 jurisdictions. The top marginal individual income tax rate is 5.00%.
Alabama burden, broken into 3 components
| Component | Alabama rate | National median |
|---|---|---|
| Top marginal income | 5.00% | ~5.30% |
| Effective property | 0.41% | ~1.07% |
| State sales tax | 4.00% | ~5.50% |
| Combined composite | 9.41% | ~11.87% |
National medians from CalcFi’s 51-state composite. Top marginal is the headline single-filer rate, NOT the effective rate most households actually pay.
Retirement + Social Security in Alabama
Alabama does NOT tax most retirement income (pensions, IRA / 401(k) distributions). Social Security benefits are NOT taxed by Alabama. Federal taxation of these income sources is unchanged regardless of state.
How Alabama compares
Of all 51 US jurisdictions ranked by combined burden composite, Alabama sits at #36. That places Alabama in the middle of the pack — burden is moderate without being a particular outlier in either direction. For the live cross-state heat map, see the interactive tax burden map.
Alabama metros — local tax overlay
State rates are uniform across Alabama— but local income, property, and sales taxes vary. Click any metro to run the full income tax calculator pre-populated with that city’s local layer.
- Birminghamproperty 0.41% · pop 1.1Mmedian $55,800 →
- Huntsvilleproperty 0.41% · pop 0.5Mmedian $72,200 →
- Montgomeryproperty 0.41% · pop 0.4Mmedian $48,600 →
- Mobileproperty 0.50% · pop 0.4Mmedian $42,500 →
More Alabama metros coming as we expand city coverage.
Alabama tax — common questions
What is the Alabama top marginal income tax rate in 2025?
Alabama's top marginal individual income tax rate is 5.00% on the highest bracket.
What is the Alabama effective property tax rate?
Alabama's statewide effective property tax rate is 0.41% of home value (annual). On a $400,000 home that's roughly $1,640/yr. Local variation can be ±0.5pp.
Does Alabama tax retirement income or Social Security?
Alabama does NOT tax most retirement income, and does NOT tax Social Security benefits.
Are there any Alabama-specific tax quirks I should know about?
Alabama is one of only three states (with IA and LA) that allows a full federal income tax deduction on the state return — meaningfully lowering effective state rate for high earners.
Reviewed by CalcFi Editorial · Source: Tax Foundation State Individual Income Tax Rates (Jan 2025). Last verified 2026-04-19. Methodology at /about/editorial.