Arizona's 2.5% flat income tax is the lowest of any state that has one. See exactly what you take home after federal tax, state tax, Social Security, and Medicare.
Under SB 1828 (effective 2023), Arizona moved to a flat 2.5% income tax rate — the lowest of any US state that levies an income tax. Arizona conforms to the federal standard deduction ($16,100 single / $32,200 married / $24,150 HOH), giving most workers a large income exemption before the 2.5% rate kicks in. No Arizona city — including Phoenix, Scottsdale, Tucson, or Tempe — adds a local income tax on wages.
Estimates only. Arizona flat rate: 2.5% (SB 1828). Standard deduction conforms to federal ($16,100 single / $32,200 married / $24,150 HOH). Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Arizona State Tax (2.5%) | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
Arizona has a flat 2.5% state income tax rate for 2026 — the lowest flat income tax rate of any US state. This single rate applies to all income levels equally. Arizona's flat tax was established under SB 1828, effective tax year 2023, reducing from a graduated system with a top rate of 4.5% down to 2.5% for all earners.
Four taxes come out of an Arizona paycheck: federal income tax (progressive brackets based on your W-4), Arizona state income tax (2.5% flat), Social Security (6.2% up to $184,500), and Medicare (1.45% on all wages). Phoenix, Scottsdale, Tucson, Mesa, Tempe, Chandler, Gilbert, and all other Arizona cities do not add a local income tax on wages.
Arizona uses Form A-4, where employees elect a percentage of gross wages to withhold for state income tax: 0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, or 3.5%. The default if no A-4 is submitted is 2.0%. Most employees should elect 2.5% to match their actual flat tax liability. Unlike most states, Arizona withholding is not based on deductions and tables — it is a simple percentage of gross pay.
No. Phoenix, Scottsdale, Tucson, Mesa, Tempe, Chandler, Gilbert, Peoria, and every other Arizona city and county cannot levy a local income tax on wages. Arizona state law prohibits local income taxes. Every Arizona worker pays the same zero in local income tax regardless of city, making Arizona one of the cleanest paycheck states in the country.
Significantly more. A single Arizona resident earning $100,000 pays approximately $2,100 in state income tax (2.5% on taxable income after standard deduction). The same California earner pays $6,000–$7,500 in state income tax. That's roughly $4,000–$5,400 more per year in Arizona — not counting California's 1.1% SDI on wages. The gap widens at higher income levels as California's top rate reaches 13.3%.
Arizona's minimum wage adjusts annually based on the Consumer Price Index. It was $14.35 per hour in 2024 and $14.70 per hour in 2025. The 2026 amount was set in September 2025 by the Industrial Commission of Arizona. Flagstaff has its own higher minimum wage ordinance. Employers in Phoenix and most cities must pay at least the state minimum wage.
Yes. The One Big Beautiful Bill (2026) exempts overtime premiums and up to $25,000 in tips from federal income tax only. Arizona still taxes overtime and tip income at the standard 2.5% state rate. The Arizona impact is minimal given the low 2.5% rate — a worker earning $10,000 in overtime pays only $250 in Arizona state tax on that amount. Use our Overtime Tax Calculator to see the combined picture.
Pre-tax 401(k) contributions reduce both your federal and Arizona state taxable income. Arizona conforms to federal adjusted gross income (AGI), so any pre-tax deduction that lowers your federal AGI also lowers your Arizona taxable income. Because Arizona's rate is only 2.5%, the state savings on a $500/month 401(k) contribution is about $12.50/month — modest but still real, on top of the larger federal savings of $90–$135/month depending on your bracket.