Alabama New Employer Registration: Step-by-Step Guide

Last reviewed: July 2026

Hiring your first employee in Alabama sets off a short chain of registration requirements at both the federal and state level. Missing a step can delay your first payroll or leave you unable to deposit taxes you already owe. Here is the order most new employers follow, along with the current agency names and links.

Registration Overview

Here is what every new Alabama employer needs on file:

• ☑ Federal Employer Identification Number (EIN)
• ☑ Alabama withholding tax account (Alabama Department of Revenue)
• ☑ Alabama SUI account (Alabama Department of Workforce)
• ☑ Form A-4 on file for each employee
• ☑ Workers' compensation insurance, if applicable
• ☑ New hire reporting within 7 days of start date

Step 1: Get Your Federal EIN

Your Employer Identification Number (EIN) is your federal tax ID. You will need it for federal tax filings, both Alabama state registrations, opening a business bank account, and running payroll generally.

Apply online at IRS.gov/EIN. It is free, and you receive your EIN immediately after submitting the application.

Step 2: Register with Alabama Department of Revenue

Visit the Alabama Department of Revenue website to register for a withholding tax account. This account lets you withhold Alabama state income tax from employee paychecks and remit it to the state on a schedule tied to your withholding volume.

Every employee also needs to complete Form A-4, the Employee's Withholding Tax Exemption Certificate, at the time of hire. Alabama's exemption categories differ from the federal W-4, so a completed federal form cannot substitute for it.

From the Payroll Desk

Don't wait until your first payroll to register. State registrations can take days to process, so start as soon as you know you'll be hiring.

Step 3: Register for SUI

Register for a State Unemployment Insurance account through the Alabama Department of Workforce, the agency formerly known as the Alabama Department of Labor. You'll be assigned:

• An employer account number
• Your initial SUI rate: 2.7% for new employers
• Quarterly wage reporting requirements

SUI is an employer-paid tax on the first $8,000 of each employee's wages for the year. See our Alabama SUI Rates 2026 guide for a deeper breakdown.

Step 4: Workers’ Compensation Insurance

Alabama generally requires workers' compensation coverage once an employer has five or more employees (with lower thresholds for some industries such as mining). Coverage protects both you and your employees if someone is injured on the job.

You can obtain workers' comp through a private insurance carrier. Compare quotes from a few carriers, since rates vary by industry classification, payroll size, and claims history.

Step 5: New Hire Reporting

Federal and Alabama law require you to report every new hire within 7 days of their start date. The report goes to the Alabama Department of Workforce and is used to enforce child support orders and detect unemployment fraud.

Reporting is available online through the state's new hire portal. See our New Hire Reporting guide for the federal side of this requirement.

Step 6: Set Up Payroll

With registrations complete and your first employee's A-4 on file, you're ready to run payroll. Use our Alabama paycheck calculator to check withholding math, and our W-4 helper tool to walk new hires through their federal withholding elections. For a full walkthrough of ongoing obligations, read How to Do Payroll in Alabama, and see the Form 941 guide for your federal quarterly filing.

Most new employers eventually move off manual calculations. Payroll software can apply the correct Alabama withholding tables, track your SUI liability, and file quarterly returns automatically once your volume grows past a spreadsheet.

Frequently Asked Questions

How do I register as a new employer in Alabama?

Get a federal EIN from the IRS, register for a withholding tax account with the Alabama Department of Revenue, register for an SUI account with the Alabama Department of Workforce, and set up workers' compensation coverage before your first payroll.

When must I register as an employer in Alabama?

Register as soon as you know you will hire your first employee. State registrations can take days to process, and you need active account numbers in hand before you can legally withhold or deposit Alabama payroll taxes.

Do I need workers' compensation insurance in Alabama?

Most Alabama employers with five or more employees must carry workers' compensation insurance. Coverage can be purchased through a private insurance carrier, and rates depend on your industry classification and payroll size.

What is Form A-4 and who needs to fill it out?

Form A-4 is Alabama's Employee's Withholding Tax Exemption Certificate. Every employee must complete one at the time of hire so you can calculate state income tax withholding; a federal W-4 does not substitute for it.

How soon do I need to report a new hire in Alabama?

Alabama law requires new hire reports within 7 days of an employee's start date. Reports go to the Alabama Department of Workforce, which enforces the state's new hire reporting law.