Overview: When starting a business with employees in Alabama, you’ll need to register for several state and local tax accounts to remain compliant.
Important! This guide does not constitute legal or tax advice. You can consult a CPA or attorney for official guidance.
Taxes You Must Register For:
State Income Withholding Tax
Tax Agency: Alabama Department of Revenue (ADOR)
Tax Type: State Income Withholding Tax
Registration Steps
Step 1: Register for a withholding account number
Go to the MyAlabamaTaxes portal (https://myalabamataxes.alabama.gov/_/#1)
Click “Register a Business / Obtain a new tax account number”
Enter entity type and Federal EIN; answer “No” for existing tax accounts
Select Payroll Withholding Tax as a tax type
Complete the remaining information, including contact and email
Submit the application and print the confirmation page
You’ll receive a Sign-on ID and Access Code by mail in 3–5 business days
Step 2: Create an ADOR login account
Go back to the MyAlabamaTaxes site (https://myalabamataxes.alabama.gov/_/#1)
Click “Create My Alabama Taxes Account”
Enter your account number, Sign-on ID, and Access Code
Set your username, password, and security questions
Complete contact info and enable third-party access
Submit to finalize account setup
Once you have your account number, update your Buddy Punch Payroll account with it.
Need help?
ADOR Business Registration: (334) 242-1584
Unemployment Insurance (UI) Tax
Tax Agency: Alabama Department of Labor
Tax Type: Unemployment Insurance (UI)
Registration Steps
Go to eGov registration page: https://labor.alabama.gov/egovregistration/
Create a username, password, and security question
Complete the employer registration form with your business info
➤ Must be completed within 20 days of hiring your first employee
Once received, update Buddy Punch with your Alabama UI account number.
Need help?
Phone: (334) 954-4701
Email: eGov@labor.alabama.gov
Local Occupational Taxes
Tax Agency: Local municipal tax agencies
Tax Type: Occupational license taxes and fees
Registration Steps
Contact each local agency where your employees work
Ask for:
Payroll account registration for occupational license tax
Annual business license application (usually due Jan 1st)
If your jurisdiction is managed by Avenu Insights & Analytics:
Avenu will provide a single account number for all its managed localities
If NOT managed by Avenu:
The local jurisdiction will issue a tax ID (sometimes your EIN)
Update Buddy Punch with all local account numbers you receive.