How do you move from an EORto your own entity in Alabama.
Teamed forms your Alabama entity, migrates payroll and benefits over, and hands you a compliant company ready to run on its own.
At a glance
Alabama entity setup, at a glance
Setting up in Alabama costs a $200 filing fee with the Secretary of State, and the state's business privilege tax carries a $0 minimum, calculated on a margin basis, so early-stage entities often owe little at first.
- Minimum franchise tax
- $0
- Franchise tax basis
- margin
- Formation / registration fee
- $200
Timing
When moving to your own entity makes sense in Alabama
Employers usually consider forming their own Alabama entity once hiring becomes steady rather than occasional. Teamed's crossover calculator compares your current EOR costs against running an entity, based on your salaries and how long you plan to stay in the state, rather than a fixed headcount.
There's no universal trigger point. A single long-term hire in Alabama can justify an entity if you plan to stay for years, while a larger team testing the market might stay on an EOR longer. Talk to a member of the team before you decide, since the right timing depends on your specific plans, not a rule of thumb.
Costs
What running your own entity costs in Alabama
Forming an entity in Alabama starts with a $200 filing fee paid to the Alabama Secretary of State. That's a one-time registration cost, separate from any ongoing compliance work you'll take on once the entity exists.
Alabama's business privilege tax has a minimum of $0, and it's calculated on a margin basis. That structure means a new or lean entity may owe very little in early years, though the exact amount depends on your margin as your Alabama operations grow.
Honest take
An EOR is sometimes still the right call
An employer of record is sometimes the better answer, not a lesser one, especially for a small or still-changing team in Alabama, or while you're testing the market before committing. Talk to a member of the team to walk through your situation, or run the numbers yourself with the crossover calculator.
Your own entity
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Teamed's Global Entity and Employment Operations, which we call GEMO, builds and hands over compliant entities across 100+ countries. In Alabama, that means we register the entity, transfer your employment contracts and benefits, and stay involved until everything runs cleanly on your own registrations.
For Alabama specifically, that includes handling the Secretary of State filing and setting up the business privilege tax registration from day one, so the entity you inherit is already compliant with the state's margin-based filing requirement, not just formed on paper.
Process
How the migration itself works
Teamed runs the transition in parallel, not as a hard cutover. Your Alabama employees keep receiving pay and benefits without interruption while the new entity's registrations, tax accounts, and payroll setup are completed in the background.
Once the entity is live and tested, we migrate contracts over and step back, but we stay available if a filing or compliance question comes up later. You end up owning a working entity, not a half-finished registration.
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, especially for a small or still-changing team in Alabama, or while you're testing the market before committing. Talk to a member of the team to walk through your situation, or run the numbers yourself with the crossover calculator.
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.
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.
For Alabama specifically, that includes handling the Secretary of State filing and setting up the business privilege tax registration from day one, so the entity you inherit is already compliant with the state's margin-based filing requirement, not just formed on paper.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Common questions about moving from an EOR in Alabama
How much does it cost to set up an entity in Alabama?
The Alabama Secretary of State charges a $200 filing fee to register a new entity. Beyond that, ongoing costs depend on your payroll, benefits, and compliance setup, which Teamed can help estimate for your specific situation.
What is Alabama's business privilege tax and will my new entity owe it?
Alabama's business privilege tax, sometimes called a franchise tax, has a $0 minimum and is calculated on a margin basis. That means a smaller or newer entity may owe little at first, but the exact liability grows with your margin as the business scales.
How long does moving from an EOR to my own entity in Alabama take?
Timelines vary by how quickly filings are processed and how many employees you're migrating. Teamed manages the registration and transfer in parallel with your existing EOR arrangement so employees don't see a gap in pay or benefits.
Do I need a set number of employees before switching from an EOR?
No, there's no fixed headcount rule. The right time depends on your salaries and how long you plan to stay in Alabama, which is exactly what the crossover calculator is built to model.
Can I go back to an EOR if my own entity in Alabama doesn't work out?
Yes, an employer of record remains a valid option even after you've formed an entity, particularly if your plans in Alabama change. It's worth talking to a member of the team before deciding either way.
Where these figures come from
Sources
These figures come from the Alabama Department of Revenue and the Alabama Secretary of State fee schedule.
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