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Taxes
Arizona Payroll Taxes 2026: Complete Overview for Employers
Arizona flat 2.5% income tax, SUI on the first $8,000, and all employer tax obligations explained.
Practical guides on AZ payroll taxes, employer registration, SUI, minimum wage, and labor laws — written for small business owners, not accountants.
Written by payroll professionals at Pacific Data Services — trusted since 1969.
Arizona’s flat 2.5% income tax rate simplifies withholding calculations and keeps the tax burden relatively low for employees.
Arizona’s $8,000 SUI wage base is among the lowest nationally, but the maximum rate of 20.60% can be steep for high-turnover employers.
Arizona’s minimum wage adjusts annually for inflation and stands at $14.70/hr, well above the federal minimum.
Arizona flat 2.5% income tax, SUI on the first $8,000, and all employer tax obligations explained.
Get your EIN, register with Arizona, set up withholding, new hire reporting — the complete checklist.
New employer rate 2.0%, experienced range 0.08%–20.60%, wage base $8,000.
Arizona minimum wage $14.70/hr. Arizona’s minimum wage is $14.70/hr with a $3.00/hr tip credit. The rate adjusts annually for inflation.
IRS classification rules, Arizona-specific considerations, misclassification penalties.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for Arizona small businesses.