Arizona payroll taxes
Every tax withheld from a Arizona paycheck or paid by the employer in 2026, with rates and wage limits.
Last verified November 2, 2026. Sources: oui.doleta.gov, azleg.gov, oregon.gov.
| Tax | Employee pays | Employer pays | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $184,500 |
| Medicare | 1.45%* | 1.45% | No limit |
| FUTA | — | 0.6% | $7,000 |
| Arizona SUTA | — | 2% (new) | $8,000 |
| Arizona income tax | 2.5% | — | — |
*Plus 0.9% Additional Medicare Tax withheld on wages over $200,000. FUTA rate shown is net of the state credit.
State unemployment insurance
Arizona charges new employers 2% on the first $8,000 each employee earns in a year. After a few years, the rate is based on the employer's layoff history and ranges from 0.03% to 8.36%. Wage base fixed by statute.
Register and file with the Arizona unemployment tax agency.
Income tax withholding
Arizona has a flat income tax of 2.5% on taxable income.
Frequently asked questions
- What payroll taxes do employers pay in Arizona?
- Social Security, Medicare, federal unemployment (FUTA) and Arizona unemployment insurance (SUTA).
- What is the Arizona SUTA wage base for 2026?
- $8,000 per employee.
- Does Arizona require state income tax withholding?
- Yes. Employers withhold Arizona income tax based on the employee's state withholding certificate or federal W-4.