Commercial cleaning and janitorial insurance in Alabama

Alabama licenses come by the county and the city

Alabama doesn't license commercial cleaning as a trade, and janitorial service isn't on the sales tax base. What it does have is layered business licensing and an annual entity tax.

State, county and city licenses

The Department of Revenue says a state privilege license under Title 40, Chapter 12 is required of every business that chapter describes. The state and county licenses are issued together by the county Probate Judge or License Commissioner, and unless the law says otherwise, a license is required in every county where you do business. City licenses are separate, and the Department doesn't administer them.

A change in 2025 makes city licenses easier to compare. Under the Business License Tax Reporting and Appeals Act, every locality must file its license classifications and schedules with the Department by March 30, and the Department posts them starting April 1, 2026. Before you bid a building in a new town, you can look up what its license will cost. Confirm the current rule with the Alabama Department of Revenue.

The Business Privilege Tax

LLCs and corporations also owe an annual Business Privilege Tax on their Alabama net worth, at $0.25 to $1.75 per $1,000, with a $15,000 maximum. For tax years beginning after December 31, 2023, a tax that works out to $100 or less is fully exempt, and no return is due. Corporations also pay a $10 annual report fee to the Secretary of State. Put the privilege tax return on the same calendar as your license renewals so neither slips while you're busy bidding.

Sales tax

Alabama's state sales tax applies to sales of tangible goods and to places of amusement or entertainment, plus some reduced-rate items. Janitorial and building cleaning aren't among the taxed items, so you don't need a sales tax permit for cleaning alone. You do pay sales or use tax on the chemicals, supplies and equipment you buy.

We found no Alabama janitorial employer registration, building-service wage or worker-retention law. School and public buyers set their own screening terms, so ask each one what it requires.

Alabama comp: five employees, and officers are part of the five

Alabama's comp law applies once one business regularly has five or more people on staff. Part-time staff count the same as full-time, and so do corporate officers. That's the rule our lede's example turns on.

Alabama uses NCCI classes, and contract janitorial crews are usually rated under Code 9014. Because part-time night staff count the same as full-time, a company that staffs buildings with several short shifts reaches five people faster than its payroll suggests. Track your headcount, not just your hours, and talk to the Alabama Workers' Compensation Division if you're unsure where you stand.

Below five, the law doesn't require comp, but a client's insurance exhibit can, and the only way to show a property manager comp and employer's liability on a certificate is to carry a policy. Our guide to class codes and audits explains how part-time payroll and 1099 cleaners are treated.

What Alabama clients ask cleaning contractors to prove

We couldn't retrieve a current Alabama public janitorial insurance exhibit, so we won't guess at limits here. Read the insurance section of every bid and every property manager's vendor packet line by line. If an exhibit names a limit you don't carry yet, send it to us before the bid walk rather than after the award, while there's still time to add an endorsement or an umbrella.

The City of Mobile's small business office confirms that the city requires surety bonds on certain contracts, and it explains how they work: if you don't perform, the city can recover up to the bond amount from the surety, which then looks to your business for repayment.

Expect the usual pieces: general liability limits, additional insured wording (the client added to your policy as a protected party), proof of comp, and sometimes a bond for theft by your staff. Our guide to cleaning contract insurance requirements walks through each line, and the janitorial bond page explains the theft bond clients ask for by name.

Get a quote for your cleaning business →

Alabama risks to plan for

Crossing five without noticing

Example scenario: A Huntsville cleaning company runs two office parks with three part-time cleaners, and the two owners, both corporate officers, work the routes themselves. It adds one part-time porter for a new account and assumes it's still under the line. Under Alabama's count it already had five employees before the porter started.

An unlicensed county

State and county licenses are tied to each county where you do business, and cities license per location or activity. Picking up a building one county over without the license is a compliance problem, not an insured one, so check before the first shift.

Alabama cities we've verified

Alabama cost factors

We don't post Alabama prices. Two local costs sit beside your insurance budget: the Business Privilege Tax (owed once it works out to more than $100) and the license in each county and city on your route.

On the insurance side, crossing five employees adds comp premium on every payroll dollar.

Your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require. Our cost guide shows the full picture.

Get a quote for your cleaning business →

Our Alabama license

Commercial Cleaning Insurance Group is a brand of The Allen Thomas Group, licensed in Alabama (License #3001929338, NPN 7642818).

Alabama owners go over their headcount, routes and contracts with a licensed agent on our team, and the quote is built from that conversation.