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REMOTE EMPLOYEES

Hiring a remote employee in Arizona

Your company is in another state and one employee lives and works from home in Arizona. Which state's taxes apply, unemployment, paid leave and Arizona's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Arizona at a glance

Income tax
Arizona withholding
Reciprocity
None
Unemployment
$8,000 wage base, 2% new employer
Paid leave
None
New hire report
Within 20 days

Which state's taxes apply

Work state
Arizona taxes wages for work done in Arizona. Withhold Arizona income tax on the employee's wages.Source: Arizona Department of Revenue, Withholding Tax (opens in a new tab), checked October 5, 2026
Withholding form
Form A-4 (Arizona Withholding Percentage Election)Source: Arizona Department of Revenue, Form A-4, Arizona Withholding Percentage Election (2026) (opens in a new tab), checked October 5, 2026
Reciprocity
No state exempts Arizona residents from its withholding by reciprocity.Source: Arizona Department of Revenue, 2026 Form WEC Employee Withholding Exemption Certificate instructions (PDF) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Arizona for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Arizona
Arizona has a 60-day rule: no Arizona withholding for a nonresident who works in Arizona fewer than 60 days a year, if the rule's other conditions are met.Source: Arizona Department of Revenue, Withholding Tax (opens in a new tab), checked October 5, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Arizona: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Arizona: the employee works from home there, so the work is localized in Arizona.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Arizona, so the work is localized in Arizona: pay Arizona unemployment tax, not your company state's.

Agency
Arizona Department of Economic Security (DES), Unemployment Insurance TaxSource: Arizona DES, Unemployment - Employer (opens in a new tab), checked October 5, 2026
Wage base
$8,000 Fixed by lawSource: Arizona DES, Unemployment Insurance Tax Rate Chart, calendar year 2026 (UIT-0603A, 12/25, PDF) (opens in a new tab), checked October 5, 2026
New employer rate
2% 2.0% for at least two calendar years, then experience-rated Surcharges includedSource: Arizona DES, Unemployment Insurance Tax Rate Chart, calendar year 2026 (UIT-0603A, 12/25, PDF) (opens in a new tab), checked October 5, 2026

Open the account: Arizona payroll tax registration

Arizona has no paid leave program funded through payroll.

Arizona employer rules

Employment law applies where the employee works, so these follow the employee into Arizona.

Final pay
Fired: Within 7 working days or by the end of the next regular pay period, whichever is sooner Quit: By the regular payday for the pay period in which the employee quit; by mail if requestedSource: Arizona Revised Statutes §23-353, Payment of wages of discharged employee (opens in a new tab), checked October 6, 2026
Pay frequency
Two or more fixed paydays a month, not more than 16 days apart. An employer whose principal place of business and payroll system are both outside Arizona may pay FLSA-exempt professional, administrative, executive and outside sales staff, and NLRA supervisors, once a month.Source: Arizona Revised Statutes §23-351, Designation of paydays for employees; payment; exceptions (opens in a new tab), checked October 5, 2026
Pay notice
At hire, the employer's business name, address and phone number in writing (A.R.S. §23-364(D)) and the written earned paid sick time notice, in English and Spanish (A.R.S. §23-375). No written pay-rate notice is required.Source: Arizona Revised Statutes §23-364, Enforcement (posting, notice, records) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the date of hire.Source: Arizona Revised Statutes §23-722.01, Employer reporting; new hire directory (opens in a new tab), checked October 5, 2026
E-Verify
Every employer must verify each new hire through E-Verify and keep the record for the length of employment or three years, whichever is longer.Source: Arizona Revised Statutes §23-214, Verification of employment eligibility; e-verify program (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee.Source: Arizona Revised Statutes §23-372, Accrual of earned paid sick time (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Arizona, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Arizona

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

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 and for each state's rules.

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