PAYROLL TAX RATES
Arizona payroll tax rates
Unemployment tax, income tax withholding, minimum wage and paid leave in Arizona, each with its effective date and the agency page it comes from.
Unemployment insurance
Checked on October 5, 2026.
Income tax withholding
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | Arizona Department of Revenue (ADOR) (opens in a new tab) | Arizona Department of Revenue, Withholding Tax (opens in a new tab) | |
| Withholding rates | 2.5% flat | Arizona Department of Revenue, Withholding Highlights (opens in a new tab) | |
| Supplemental wages | Same as regular wages | Arizona Department of Revenue, Withholding Tax (opens in a new tab) | |
| Reciprocity | California residents working here: Form WECIndiana residents working here: Form WECOregon residents working here: Form WECVirginia residents working here: Form WEC | Arizona Department of Revenue, 2026 Form WEC Employee Withholding Exemption Certificate instructions (PDF) (opens in a new tab) | |
| Employee's withholding form | Form A-4 (Arizona Withholding Percentage Election) | Arizona Department of Revenue, Form A-4, Arizona Withholding Percentage Election (2026) (opens in a new tab) | |
| Local income taxes | No | Arizona Revised Statutes §43-201, Preemption by state of income taxation (opens in a new tab) |
Checked on October 5, 2026.
Minimum wage
| Item | Value | Effective | Source |
|---|---|---|---|
| Minimum wage | $15.15 | Industrial Commission of Arizona, New 2026 Minimum Wage - Effective January 1, 2026 (release, 9/29/2025, PDF) (opens in a new tab) | |
| Next change | $15.65 | Industrial Commission of Arizona, 2027 minimum wage poster, The Fair Wages and Healthy Families Act (PDF, 9/2026) (opens in a new tab) | |
| Tipped employees, cash wage | $12.15 | Industrial Commission of Arizona, 2026 minimum wage poster, The Fair Wages and Healthy Families Act (PDF) (opens in a new tab) | |
| Rises with inflation | Yes | Arizona Revised Statutes §23-363, Minimum wage (opens in a new tab) | |
| Local rates | Flagstaff: $18.35 an hour in 2026, $18.95 from January 1, 2027; no tip credit in Flagstaff. Tucson's city rate was not confirmed here. | City of Flagstaff, Minimum Wage (opens in a new tab) |
Checked on October 5, 2026.
Paid family and medical leave
| Item | Value | Effective | Source |
|---|---|---|---|
| State program | None | Arizona Revised Statutes, Title 23 - Labor (opens in a new tab) |
Checked on October 5, 2026.
Workers' compensation
| Item | Value | Effective | Source |
|---|---|---|---|
| Required | From the first employee | Arizona Revised Statutes §23-902, Employers subject to chapter; exceptions (opens in a new tab) | |
| State fund | None; private insurers | Arizona Revised Statutes §23-902, Employers subject to chapter; exceptions (opens in a new tab) |
Checked on October 5, 2026.
What a paycheck costs the employer in Arizona
Employer taxes and contributions on one employee's pay in Arizona, per check and for the year, at the rates a new employer pays. State rates are the ones on this page; federal rates are the ones on the federal payroll tax rates page.
Pay$
Pay frequency
- Employer taxes and contributions per check
- $236.54
- First check of the year
- Cost per check
- $2,544.23
- Pay included, first check
- Cost per year
- $64,792.00
- Pay included
Later checks cost less once pay passes a wage base: the year's last check costs $2,484.23, pay included.
| Item | Rate | First check | Per year | Source |
|---|---|---|---|---|
| Social Security, employer share | 6.2% on the first $184,500 | $143.08 | $3,720.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Medicare, employer share | 1.45% of all pay | $33.46 | $870.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Federal unemployment (FUTA) | 0.6% on the first $7,000After the full 5.4% credit. Employers in a credit reduction state pay more. | $13.85None after check 4 | $42.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Arizona unemployment | 2% on the first $8,0002.0% for at least two calendar years, then experience-rated | $46.15None after check 4 | $160.00 | Arizona DES, Unemployment Insurance Tax Rate Chart, calendar year 2026 (UIT-0603A, 12/25, PDF) (opens in a new tab) |
| Employer taxes and contributions | $236.54 | $4,792.00 | ||
| Pay | $2,307.69 | $60,000.00 | ||
| Pay plus employer costs | $2,544.23 | $64,792.00 |
Checked on October 5, 2026. Shows one employee's pay for a full calendar year, every check at the rates in force on October 13, 2026, with all pay subject to these taxes, the new employer rates and the full employer shares the law sets. An employer may choose to pay an employee's share too. Benefits and other costs are not included.
Common questions
A new employer pays 2.0% for at least two calendar years, then experience-rated. The tax applies to the first $8,000 of each employee's wages a year.
Yes: 2.5% flat. Supplemental wages: same as regular wages.
$15.15 an hour. It rises to $15.65 on January 1, 2027. Some cities and counties set their own rates. See the table above.
No. Arizona has no state paid family or medical leave program funded through payroll.
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Rates in other states
- Alabama
- Alaska
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Sources
The agency page or document behind each figure, as checked.
- Arizona DES, Unemployment - Employer (opens in a new tab)
- Arizona DES, Unemployment Insurance Tax Rate Chart, calendar year 2026 (UIT-0603A, 12/25, PDF) (opens in a new tab)
- Arizona Revised Statutes §23-622, Wages (opens in a new tab)
- Arizona DES, Unemployment Insurance Tax Employer Handbook (UIT-1271A, 03/25, PDF) (opens in a new tab)
- Arizona DES, Employment Taxes - Calculating Unemployment Taxes (opens in a new tab)
- US DOL OUI, FUTA Credit Reductions (opens in a new tab)
- Arizona Department of Revenue, Withholding Tax (opens in a new tab)
- Arizona Department of Revenue, Withholding Highlights (opens in a new tab)
- Arizona Department of Revenue, 2026 Form WEC Employee Withholding Exemption Certificate instructions (PDF) (opens in a new tab)
- Arizona Department of Revenue, Form A-4, Arizona Withholding Percentage Election (2026) (opens in a new tab)
- Arizona Revised Statutes §43-201, Preemption by state of income taxation (opens in a new tab)
- Industrial Commission of Arizona, New 2026 Minimum Wage - Effective January 1, 2026 (release, 9/29/2025, PDF) (opens in a new tab)
- Industrial Commission of Arizona, 2027 minimum wage poster, The Fair Wages and Healthy Families Act (PDF, 9/2026) (opens in a new tab)
- Industrial Commission of Arizona, 2026 minimum wage poster, The Fair Wages and Healthy Families Act (PDF) (opens in a new tab)
- Arizona Revised Statutes §23-363, Minimum wage (opens in a new tab)
- City of Flagstaff, Minimum Wage (opens in a new tab)
- Arizona Revised Statutes, Title 23 - Labor (opens in a new tab)
- Arizona Revised Statutes §23-902, Employers subject to chapter; exceptions (opens in a new tab)
- IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab)
General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes.