Arizona Tax Guide for Employers (2026) 

Arizona has a unique approach to state income tax withholding. Rather than using tax brackets or a single flat rate applied to all employees, Arizona allows each employee to elect their own flat withholding percentage from a set of approved rates on Form A-4. 

Arizona’s state income tax withholding is employee-driven. Each employee selects a flat percentage rate on their Form A-4 from a list of valid values: 0.0%, 0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, or 3.5%. If the employee does not submit a Form A-4, the default withholding rate of 2.0% is applied. Employees may also claim exemption from withholding using Form WEC if they meet certain criteria. 

Arizona supports the following supplemental calculation methods. When using the flat method, the supplemental rate is Matches elected rate. 

Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 2.0%. 

Follow these steps to begin withholding Arizona payroll taxes for your employees: 

1. Obtain your Federal EIN at irs.gov
2. Register with the Arizona Department of Revenue at aztaxes.gov
3. Register for SUTA with the Arizona Department of Economic Security at azui.com
4. Submit a Netchex tax team request to enable Arizona SIT and SUTA
5. Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
6. Configure any additional tax settings in the employee profile

Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Arizona payroll taxes on your behalf. 

The following are general filing and deposit deadlines for Arizona payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Arizona Department of Revenue. 

Note: Deadlines are subject to change. Always confirm current requirements directly with Arizona Department of Revenue at https://azdor.gov/businesses-arizona/withholding-tax. 

The following official resources will help you stay current on Arizona payroll tax requirements: 

• Arizona Department of Revenue
• Arizona DOR Withholding
• Arizona Form A-4

What is Arizona’s state income tax rate? 

Arizona has a flat income tax rate of 2.5% effective 2023. 

What form do Arizona employees complete? 

Employees complete Arizona Form A-4, selecting their withholding percentage. 

What is Arizona’s SUTA wage base? 

Arizona’s SUTA wage base is $8,000 per employee per year. Verify at azui.com. 

Does Arizona have local payroll taxes? 

No. Arizona does not have local income taxes. 

What is Arizona’s supplemental withholding rate? 

Arizona’s supplemental withholding rate is 2.5% (flat rate).