Alabama in one page: what a new cleaner actually has to do
Less than most states ask, but more of it happens at city hall. Alabama has no state license for cleaning homes and no sales tax on the service. The paperwork that does apply comes from the cities you work in, from the Secretary of State if you form an LLC, and from the Alabama Department of Workforce once you hire.
The pattern is the reverse of many northern states. Forming an LLC is comparatively pricey here ($200 plus a name reservation), but keeping it is nearly free for a small company. Hiring is cheap on paper (no state minimum wage), yet the city license system means a cleaner who works across a metro area can owe several small license fees each January.
Before your first paid clean
- Choose a name. Run it through the cleaning business name generator if you’re stuck, then search the Secretary of State’s entity records.
- Decide between a sole proprietorship under your own name and an LLC. If LLC, reserve the name first, then file the Certificate of Formation.
- Get a city business license where you are based, and ask each city you plan to clean in whether it licenses businesses that come in from outside.
- Buy general liability insurance and tell your auto insurer you drive to jobs.
- Set prices with no sales tax line, then set up booking and card payments.
When you hire
- Report each new hire within 7 days.
- Register for unemployment tax once you meet the 20-week or $1,500-a-quarter test.
- Register for Alabama income tax withholding with the Department of Revenue.
- Buy workers’ comp before your headcount, owners included, reaches five.
This page is about Alabama rules only. Choosing services, buying equipment and landing first homes are covered in our general guide on how to start a cleaning business.
Does Alabama’s state and county privilege license cover house cleaning?
No. Alabama’s state and county business license (called a business privilege license) applies only to the trades listed in Title 40, Chapter 12 of the Code of Alabama, and cleaning homes is not one of them.
The Department of Revenue’s Quick Reference Guide to these licenses lists each type of business next to the code section it needs. “House Cleaning Service”, “Maid Service” and “Janitorial Service” all show “None”. So does “Carpet Cleaning Company”, with a note that cleaning rugs falls under a separate section. If you add rug cleaning, dry cleaning or laundry, look those rows up before you start.
What the county office can still ask for
The department’s business privilege license webinar explains that these licenses are sold by the county probate judge, revenue commissioner or license commissioner, renewed every October, and charged a non-waivable 15% penalty plus interest if late. It also warns that some counties levy a separate county business license fee of their own. A two-minute phone call to your county office settles it; the state keeps a directory of county license offices.
No state board, either
Alabama has no licensing board for residential cleaners, so there is no exam, bond or certificate to obtain from the state. Our national guide to licenses for cleaning businesses covers the federal pieces (an EIN, for example) that apply everywhere.
City licenses in Birmingham, Huntsville and Mobile: where your fees really start
Alabama cities run their own business licenses, the big ones price them on your gross receipts, and some want one from businesses based elsewhere that work inside city limits. For a cleaner, this is the main recurring government cost.
The state’s licensing webinar puts it plainly: some cities require a “delivery” license, so any company that comes into their jurisdiction may need one, and the state does not regulate municipal licenses. Plan on checking each city on your route.
Huntsville: a worked example
Huntsville’s business license page says a license is required for anyone operating a business in the city, commercial or residential-based. Licenses expire December 31, renewals run January 1 to 31, and a 15% penalty applies on February 1, rising to 30% on March 1.
The city’s license fee schedule has a general “Service” schedule (number 77) for any service not regarded as a profession. Ask the Revenue Division to confirm your classification, but under that schedule the fee works like this:
| Annual gross receipts | License fee |
|---|---|
| $0 to $4,999 | $35 |
| $5,000 to $9,999 | $65 |
| $10,000 to $24,999 | $95 |
| $25,000 and over | $95 plus $1 per $1,000 over $25,000 |
A solo cleaner who grosses $60,000 in Huntsville would pay $95 + (35 × $1) = $130 for the year. Small, but it repeats in every city that licenses you.
Mobile: “from, into or within”
The City of Mobile’s business license overview requires a license for anyone conducting business “from, into or within” the city and its police jurisdiction, which reaches past the city limits. A cleaner based in Daphne with clients in Mobile is doing business into the city, so the rule reaches them. Licenses expire December 31, are delinquent after January 31, and carry a 15% penalty in February and 30% from March 1.
Birmingham
Birmingham’s business license information says the city may license all businesses providing services within its limits. For licenses based on gross receipts, you buy a minimum-fee license first, and the first year is estimated from your first 90 days of operations. Renewals are due January 1 and general business licenses become delinquent on February 15. The city’s Tax and License Division also collects an occupational tax through its online portal, so ask how it applies to you and any employees when you apply.
Montgomery, Tuscaloosa and the suburbs set their own rules and fees. Before you book a home in a new city, call its license office and ask two questions: do you license service businesses based outside the city, and what is the fee for my gross receipts?
The $200 Alabama LLC, the name reservation and an optional $30 trade name
An Alabama LLC costs $200 to file plus $25 or $28 to reserve the name first. A trade name registration is optional and costs $30 for five years. Many solo cleaners start as sole proprietors and form the LLC later.
Forming the LLC
The Secretary of State’s LLC page sets the filing fee at $200 and requires a Certificate of Name Reservation before you file the Certificate of Formation. The name must include “Limited Liability Company”, “L.L.C.” or “LLC”. The office’s fee schedule lists the name reservation at $25 on paper or $28 online (printed immediately). Its domestic entities brochure confirms both steps can be done online by card, and that once the formation is processed your entity gets an Entity ID and shows “Exists” in the state’s records.
- Total to form: $225 by mail or $228 online.
- Changing it later: amendments, agent changes and dissolutions are $100 each, so pick the name and registered agent carefully.
- Closing it: the brochure warns that any entity showing “Exists” is subject to tax, and you cannot backdate a dissolution. File one if you stop.
Trade names are optional in Alabama
Alabama doesn’t make you file a DBA to trade under a name. You can register a trade name with the Secretary of State, but the application to register a trademark, service mark or trade name says ownership rights come from adopting and using a name, not from registering it. Registration costs $30, lasts five years, needs three specimens (such as a flyer or business card showing the name) and must be notarized.
Is an LLC worth $228? It keeps business debts apart from personal ones, which matters more once you hire or sign commercial contracts. It does not pay for a broken vase; liability insurance does. Our guide to LLCs for cleaning businesses weighs the trade-offs, and the next section covers the one Alabama tax every LLC has to think about.
Will your Alabama LLC owe business privilege tax?
Probably not while it’s small. Alabama taxes LLCs on their net worth in the state, but since the 2024 tax year any privilege tax of $100 or less is fully exempt, and a company in that range doesn’t file the return at all.
How the tax works
The Department of Revenue’s business privilege tax page says every corporation and limited liability entity organized or doing business in Alabama is covered, and that a new entity files an initial return (Form BPT-IN) within two and a half months of forming or starting business. Its tax summary puts the rate at $0.25 to $1.75 per $1,000 of Alabama net worth, depending on taxable income, with a $15,000 maximum.
The change that matters for cleaners is in the department’s notice on 2024 filing changes: for tax years beginning after December 31, 2023, tax due of $100 or less is fully exempt, and taxpayers whose tax works out at $100 or less are not required to file the BPT-IN or the annual return.
A worked example
Say your LLC has $20,000 of net worth in Alabama (a car, equipment and some cash in the business account, minus what it owes). Even at the top rate of $1.75 per $1,000, the tax is 20 × $1.75 = $35. That is under $100, so nothing is due and no return is required. At the top rate, you would need roughly $57,000 of Alabama net worth before the tax passed $100. Have your accountant run the real calculation each year, since the rate band depends on your income.
No annual report for LLCs
The same notice says that since January 1, 2024, only for-profit and professional corporations file annual reports with the Secretary of State ($10 each). LLCs are not on that list. So after the $228 to form, a small Alabama cleaning LLC can run for years without a state filing fee.
Do Alabama cleaners collect sales tax on a clean?
No. Alabama’s sales tax is a tax on retail sales of tangible personal property, and house cleaning is a service. Quote your price without a tax line, and you don’t need a sales tax account unless you also sell products.
What the Department of Revenue says
Its sales tax summary sets the state rate at 4% of gross proceeds on tangible personal property, with counties and cities adding local sales taxes of 0.10% to 5%. The department’s sales and use tax webinar describes sales tax as a privilege tax on the retail sale of tangible personal property, defines a retail sale as a sale of that property to the end user (excluding certain labor and services), and says the businesses that must register are retailers, places of amusement, lodging and rental businesses. Businesses outside those groups are told to ask a Taxpayer Service Center which taxes, if any, apply.
On a $150 clean
- Price of a recurring clean: $150.00
- Alabama sales tax added: $0.00
- Client pays: $150.00
Where tax does reach you is on what you buy. A $300 starter kit of vacuum, mops and chemicals bought in a city where state, county and city rates add up to 9% costs $327. That tax is a business expense, not something you pass on line by line.
Cleaning near the state line? Tax rules change at the border, so read our Georgia and Florida guides before booking homes in Columbus or Pensacola. For setting the $150 itself, the house cleaning pricing guide and the house cleaning price calculator show how to price by time, rooms and extras.
Hiring in Alabama: $7.25, workers’ comp at five, and $216 of unemployment tax
Alabama adds little on top of federal law. The wage floor is the federal $7.25, workers’ comp becomes mandatory at five employees, unemployment tax is 2.7% of the first $8,000 for a new employer, and new hires are reported within 7 days.
Wages
The U.S. Department of Labor’s state minimum wage table lists Alabama as having no state minimum wage law, so employers covered by the Fair Labor Standards Act pay the federal $7.25. Federal overtime rules apply past 40 hours a week. Alabama has no state law requiring private employers to give paid sick leave.
What a 3.5-hour visit (3 hours cleaning plus 30 minutes of driving) costs at that floor: 3.5 × $7.25 = $25.38 in wages. In practice, few owners keep reliable cleaners at the legal minimum. At $14 an hour the same visit costs 3.5 × $14 = $49.00. Run your own numbers with the cleaning business profit calculator, and see what house cleaners earn for pay benchmarks.
Workers’ comp: five, owners included
The workers’ compensation FAQ from the Department of Workforce says any business with five or more employees, other than contractors, must carry coverage, and that “employee” includes full- and part-time staff, corporate officers and LLC members. That last part surprises people: an LLC with two member owners who clean plus three part-time cleaners has five and needs a policy. Coverage is bought from a private insurance agent. Many owners buy it from the first hire because ladders, wet floors and chemicals are part of the job; our insurance guide for cleaners covers the rest of the policies.
Unemployment tax
The department’s employer information says a business becomes liable once it has had one or more workers on some day in 20 different weeks of the current or prior year, or has paid $1,500 or more in wages in any calendar quarter. Newly liable employers pay 2.70% on the first $8,000 of each employee’s wages: at most $216 per employee per year. You register with Form SR-2 as soon as you become liable.
New-hire reports
Alabama’s new-hire reporting page requires each new or recalled employee to be reported within seven days of hire, with fines of up to $25 per violation. Employers with five or more employees must report online; smaller ones can send copies of W-4s marked with the start date.
Contractors are not a shortcut
Calling cleaners 1099 contractors doesn’t make them contractors if they work your schedule, use your supplies and follow your checklist. Misclassification can mean back taxes and a workers’ comp problem after an injury. Ask an accountant before you decide.
What it costs to open an Alabama cleaning company
State fees are $0 for a sole proprietor under their own name, or about $228 for an online LLC. City licenses, insurance and supplies are the real startup costs.
Government fees were checked on official pages on October 9, 2026. Rows marked “estimate” are our rough ranges, not quotes.
| Cost item | Cost | Notes |
|---|---|---|
| State or county privilege license | $0 | Not required for house cleaning. Ask your county about any separate county fee. |
| City business license | $35 to $130 in Huntsville | On $0 to $60,000 of gross receipts under the Service schedule. Each city sets its own fee. |
| LLC name reservation | $25 paper, $28 online | Required before the Certificate of Formation. |
| LLC Certificate of Formation | $200 | Optional. Filed with the Secretary of State. |
| Business privilege tax | $0 if $100 or less | No return needed while the tax works out at $100 or less. |
| Trade name registration | $30 for five years | Optional. Notarized, with three specimens. |
| Sales tax account | Not needed for cleaning | Only if you sell products. |
| Unemployment tax | Up to $216 per employee per year | 2.70% of the first $8,000 for new employers, once liable. |
| Workers’ comp | Get quotes | Required at five employees, LLC members included. |
| General liability insurance | Get quotes | Compare two or three quotes with identical details. |
| Starter supply kit | $200 to $500 (estimate) | Includes local sales tax on what you buy. |
| Booking, scheduling and payment software | Your choice | BroomBook is $29 a month for up to 2 cleaners, with a 14-day free trial. |
A lean Huntsville start as a sole proprietor: a $35 first-year city license, $200 to $500 of supplies (our estimate) and the first insurance payment. Add $228 if you form the LLC online. The cleaning business supplies list helps you avoid buying more than the first month needs.
First Alabama clients, and where BroomBook fits
With little state paperwork in the way, the hard part in Alabama is filling the calendar. Our guide on how to get clients for a cleaning business covers neighborhood groups, referrals and Google reviews, and it pays to start in the one or two cities you are already licensed in.
We make BroomBook, scheduling and online booking software for residential cleaning businesses. Clients book online and see an instant price based on bedrooms, bathrooms and extras. Sales tax is an optional setting with one rate for the whole business, so an Alabama company simply leaves it off. You can limit your service area by distance or ZIP code, which helps keep bookings inside the cities where you hold a license. The card on file is charged after the clean through Stripe, tips included, and BroomBook takes no cut. Cleaners get a private link (no download) with their jobs, checklists and clock in and out, and hours, tips and commission export to CSV for your payroll service. Text and email reminders go out automatically.
BroomBook does not calculate withholding, file taxes or city license returns, or sync with QuickBooks, and it has no app-store app. Plans are $29 a month on Solo (up to 2 cleaners) or $59 a month on Team (unlimited cleaners), with a 14-day free trial and no credit card. See the calendar on our cleaning scheduling software page.