--- title: "Alabama Entity Running Costs and Filings" description: "What it actually costs to form and keep a company alive in Alabama, and how Teamed's EOR removes that cost entirely." canonical: https://www.teamed.global/country-hiring-guides/united-states/alabama/entity-running-costs-and-filings --- ![Alabama business district.](/cluster-assets/country-hiring-guides/united-states/alabama/entity-running-costs-and-filings/images/hero.webp) # What does it cost to runa company in Alabama. Alabama charges a $200 formation fee and a business privilege tax with a $0 minimum. Teamed's EOR avoids both entirely. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Alabama guide 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 margin rather than a flat charge, and carries a minimum of $0. 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 basismargin 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 margin, not a flat annual bill Alabama's business privilege tax is calculated on margin rather than charged as a flat sum, and the minimum owed is $0. That structure means a small or newly formed entity may not owe tax in a given year, but a $0 liability does not mean $0 obligation. The filing itself still has to happen, correctly and on time, regardless of what's owed. 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 Alabama 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, since the right point to set up your own entity depends on salaries and how long you intend to stay, not a fixed headcount. Your own entity ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. When an Alabama entity does make sense for you, Teamed's Global Entity and Employment Operations service, which we call GEMO, sets it up, migrates your employees across from the EOR arrangement, and hands you a clean, fully compliant entity, not a half-finished project. It works the same way across 100+ countries, so the transition is a repeatable process rather than a one-off scramble. In Alabama specifically, that means GEMO handles the $200 Secretary of State registration, gets the business privilege tax filing set up correctly from the start, and puts a registered agent in place before your team's first day under the new entity. 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, since the right point to set up your own entity depends on salaries 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 salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. In Alabama specifically, that means GEMO handles the $200 Secretary of State registration, gets the business privilege tax filing set up correctly from the start, and puts a registered agent in place before your team's first day under the new entity. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Alabama 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 margin, and the minimum owed is $0. A low or non-existent margin can mean no tax due, but the return still needs to be filed correctly and on time. Is a $0 minimum tax the same as no filing obligation? No. A $0 minimum means the amount owed can be zero, not that the filing requirement disappears. Entities still need to submit the paperwork each cycle to stay in good standing. 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 salary levels 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. ## More on entities in Alabama - [Hiring in Alabama, overview](/country-hiring-guides/united-states/alabama)parent - [Alabama setting up](/country-hiring-guides/united-states/alabama/entity-setup)sibling - [Alabama tax presence](/country-hiring-guides/united-states/alabama/permanent-establishment-risk)sibling - [Alabama entity or eor](/country-hiring-guides/united-states/alabama/eor-vs-entity)sibling - [Alabama moving from an eor](/country-hiring-guides/united-states/alabama/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Alabama](https://www.teamed.global/contact?from=entity-running-costs-and-filings)CTA