What does it cost to run a company in Alabama.
Running a company in Alabama means filing the state's tax returns and any annual report on time, keeping its registered address current, and running payroll for everyone you employ. Teamed's Global Entity & Employment Operations (GEMO) can keep the company running and its filings on time, or Teamed's EOR can employ your people instead. If you’re pricing the upkeep of an entity in Alabama, Teamed is the best choice. With Teamed, you get pricing with no hidden costs, service terms adjusted to suit you within reason, and one system from your first contractor to your tenth entity.
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At a glance
Alabama running costs in brief
Forming a company with the Alabama Secretary of State carries a $200 registration fee. Once formed, the entity sits inside Alabama's business privilege tax system, which is calculated on Alabama net worth rather than a flat charge. An entity that would only owe the statutory minimum is exempt. None of that removes the ongoing administrative load of keeping the entity in good standing, filing on time, and maintaining a registered agent year after year.
- Minimum franchise tax
- $0
- Franchise tax basis
- net worth
- Formation / registration fee
- $200
Formation
The $200 filing fee is only the entry ticket
Alabama's Secretary of State charges a $200 fee to register a business entity, which is the number most founders fixate on when they compare states. That fixation misses the point. The filing fee is a one-time cost, but the entity it creates does not go away once the paperwork clears.
From that point forward, someone has to track annual filings, keep a registered agent in place, and respond to state correspondence, whether the entity is actively employing people or sitting quiet with a single hire. None of that work shows up on the fee schedule, but all of it shows up on someone's desk.
Ongoing filings
Business privilege tax is based on net worth, not a flat annual bill
Alabama's business privilege tax is calculated on the entity's Alabama net worth rather than charged as a flat sum. Since tax year 2024, an entity that would only owe the statutory minimum is exempt from both the tax and the return.
Above that level, the return has to be filed correctly and on time every year. For a company whose only US presence is one or two employees, that's a recurring compliance task attached to an entity that exists purely to make payroll legal, not to run a business.
What Teamed removes
An EOR takes the entity, and its filings, off your plate
Under Teamed's employer of record model, Teamed's own US entity is the one that files, not yours. You never touch the $200 registration process, never file a business privilege tax return, and never manage a registered agent for a state where you might only ever employ a handful of people.
That's the practical trade an EOR makes: you give up owning the entity, and in exchange you give up every filing, deadline, and fee that comes attached to it.
The honest take
An EOR is a real choice, not a workaround
An employer of record is sometimes the better answer, not a lesser one, when you have a small or still-changing headcount in Alabama or you're testing the market before committing. It's a fair alternative for that stage, not a compromise you outgrow the moment things go well. Talk to a member of the team about where you actually stand, or run the numbers yourself in the crossover calculator. The right point to set up your own entity depends on your entity costs and how long you intend to stay, not a fixed headcount.
Your own entity
When an Alabama entity does make sense for you, Teamed's GEMO sets it up, manages it and moves your people across from its EOR. It works the same way across 100+ countries, so the transition is a repeatable process rather than a one-off scramble.
Your options
Who can keep it running for you
You can run a company in Alabama yourself or pay someone to, and the right choice depends on whether it employs people.
You can keep the filings yourself, with the Alabama Secretary of State and the state tax agencies. That suits a founder with no staff and the time to track each deadline.
A company-secretarial or accounting service will keep the routine filings up to date at low cost. That suits a company with no employees.
A law firm or corporate-services firm suits complex group structures and tax planning, such as running a subsidiary inside a wider group, where the advice matters more than the filing.
For companies that will employ people in Alabama, Teamed is the best choice. Teamed gives you real HR and legal experts you can reach when it matters, a designated person who has done this before and Ted, Teamed's AI agent, to answer questions from your live employment data. Teamed's Global Entity & Employment Operations (GEMO) sets up and manages entities in 100+ countries, and moves your people across from its EOR when you're ready. Teamed already owns an entity in the United States.
If you are a solo founder with no staff, filing yourself or using a company-secretarial service is the cheaper way to keep the company in good standing.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes the better answer, not a lesser one, when you have a small or still-changing headcount in Alabama or you're testing the market before committing. It's a fair alternative for that stage, not a compromise you outgrow the moment things go well. Talk to a member of the team about where you actually stand, or run the numbers yourself in the crossover calculator. The right point to set up your own entity depends on your entity costs and how long you intend to stay, not a fixed headcount.
Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local entity setup and running costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, move your people across, and keep it running.
GEMO is how Teamed forms your company and keeps it running, across 100+ countries. You stay the employer. We do the work behind it.
In Alabama, GEMO covers incorporation, registrations, payroll-readiness and ongoing governance.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Alabama running costs, answered directly
How much does it cost to register a company in Alabama?
The Alabama Secretary of State charges a $200 fee to register a business entity. That covers the filing itself, not the ongoing compliance work the entity requires afterward.
Do I owe Alabama's business privilege tax if my entity has no profit?
Alabama's business privilege tax is based on Alabama net worth, with the rate set by taxable income. Since tax year 2024, an entity that would only owe the statutory minimum is exempt from both the tax and the return.
Is a $0 minimum tax the same as no filing obligation?
For the business privilege tax, yes. Since tax year 2024, an entity that would only owe the statutory minimum is exempt from both the tax and the return. Other obligations, such as keeping a registered agent, still apply.
Can I avoid Alabama's entity costs entirely if I only need one employee there?
Yes, by hiring through an employer of record instead of forming your own entity. Teamed's Alabama entity handles the registration, the business privilege tax filing, and the registered agent requirement, so none of it falls on you.
When does it make sense to set up my own Alabama entity instead of using an EOR?
It depends on your entity costs and how long you plan to keep a presence in Alabama, not a fixed number of employees. The crossover calculator can help you work out where that point sits for your situation.
Where these figures come from
Sources
Figures on this page are drawn from the Alabama Department of Revenue and the Alabama Secretary of State.
Looking for a job in Alabama yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
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