Overview
Arkansas uses a progressive income tax system with graduated brackets. The state has a relatively simple withholding setup that relies on the number of personal allowances claimed on Form AR4EC, along with a standard deduction.
What Makes Arkansas Unique: Arkansas has undergone significant income tax rate reductions in recent years, with the top rate dropping to 3.9% in 2024. Employees use Form AR4EC to claim withholding allowances.
State Income Tax (SIT)
Arkansas imposes a progressive state income tax on wages. For 2026, each personal allowance is valued at $29 and the standard deduction is $2,470. Withholding is calculated by annualizing the employee’s wages, applying the standard deduction and allowances, and then using the state’s tax brackets to determine the annual tax. There is also a special provision for Texarkana residents.
| Tax Structure | Progressive with graduated brackets |
| State Withholding Form | Form AR4EC |
| Personal Allowance Value | $29 per allowance |
| Standard Deduction | $2,470 |
| Supplemental Rate | 3.9% |
| Special Requirements | Texarkana residents may have special provisions |
Supplemental Wages
Arkansas supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 3.9%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 3.1%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 3.1% |
| Rate Assignment | Experience-rated; assigned annually by the state |
How to Set Up Arkansas Payroll Withholding
Follow these steps to begin withholding Arkansas payroll taxes for your employees:
- Obtain your Federal EIN at irs.gov
- Register with the Arkansas Department of Finance and Administration at atap.arkansas.gov
- Register for SUTA with the Arkansas Division of Workforce Services at dws.arkansas.gov
- Submit a Netchex tax team request to enable Arkansas SIT and SUTA
- Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
- Configure any additional tax settings in the employee profile
Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Arkansas payroll taxes on your behalf.
Arkansas Payroll Tax Filing Deadlines
The following are general filing and deposit deadlines for Arkansas payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Arkansas Department of Finance and Administration.
| Tax | Deposit Frequency | Typical Due Date |
| SIT Withholding | Monthly | 15th of the following month |
| SIT Withholding | Quarterly | Last day of month following quarter |
| Annual Reconciliation (AR3MAR) | Annual | February 28 |
| SUTA | Quarterly | April 30, July 31, Oct 31, Jan 31 |
Note: Deadlines are subject to change. Always confirm current requirements directly with Arkansas Department of Finance and Administration at https://www.dfa.arkansas.gov/income-tax/withholding-tax-branch/.
Resources & Links
The following official resources will help you stay current on Arkansas payroll tax requirements:
Frequently Asked Questions: Arkansas Payroll Taxes
What is Arkansas’s top income tax rate?
Arkansas’s top income tax rate is 3.9% as of 2024, reduced from higher prior rates.
What form do Arkansas employees complete?
Employees complete Form AR4EC, the Arkansas Employee’s Withholding Exemption Certificate.
What is Arkansas’s SUTA wage base?
Arkansas’s SUTA wage base is $7,000 per employee per year. Verify at dws.arkansas.gov.
Does Arkansas have local payroll taxes?
No. Arkansas does not impose local payroll taxes.
What is Arkansas’s supplemental withholding rate?
Arkansas uses its regular progressive rate schedule for supplemental wages.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026.
For the most current requirements, please refer to the Resources & Links section above.
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