The fee is calculated by taking the total gross wages (before deductions) paid during a calendar quarter to covered employees working on a construction or maintenance site in Alabama and multiplying these wages by the fee rate of .0015. As an example, an employer would owe a fee of $150 per $100,000 of covered wages.
Related FAQs in Construction Employer Fee, Income Tax
The fee does not apply to projects performed outside the state of Alabama or to licensed contractors who receive five percent or less of their primary business from construction services described in either NAICS Code 237 or 238. Contractors will need to allocate the wages of a covered employee who is working on projects both in Alabama and outside Alabama during a quarter.
No, the fee applies only to the wages paid for the skilled labor of payroll workers of the employer directly engaged in construction operations at the location of any construction or maintenance site in Alabama.
No, the fee does not apply to employees of a manufacturer, engineering firm or fabricator unless directly working on a construction or maintenance site performing installation or other services and who are at or below the working foreman level.
No, the Act excludes wages paid for labor or service performed by clerical, management, owners, or supervisory employees above the working foreman level or payments to independent contractors. Wages included are those paid to full or part-time skilled craftsmen in the field as well as those of an apprentice or laborer working on the jobsite, whether based on an hourly rate, salary, or otherwise.
No, this is not a tax on the individual employee or independent contractor but is a fee paid by the contractor-employer based on the total gross quarterly wages paid to covered construction employees for labor or services performed on a construction or maintenance site located in Alabama.