What is the Arizona income tax rate in 2026?

Arizona has a flat 2.5% income tax rate in 2026, one of the lowest state income tax rates in the nation. The rate was reduced from 2.98% (and previously from a progressive system topping at 4.5%) after voters approved Proposition 208 reforms and the legislature enacted a flat rate. The standard deduction is $14,600 (single) or $29,200 (married filing jointly).

Does Arizona have local income taxes?

No. Arizona does not levy any city, county, or municipal income taxes. Your only state-level income tax is the flat 2.5% rate. Arizona also has no state-level payroll taxes beyond the federal FICA contributions (Social Security and Medicare). This makes Arizona tax planning straightforward — your take-home is the same in Phoenix, Tucson, Scottsdale, or Flagstaff.

Arizona Paycheck Calculator 2026

Q: How does Arizona compare to California for taxes?

Arizona's 2.5% flat rate is dramatically lower than California's progressive rates (1% to 13.3%). On an $80K salary, you'd pay about $1,635 in AZ state tax vs roughly $2,900+ in CA state tax plus California's SDI payroll tax (1.1%). Combined with lower cost of living, Arizona is one of the most popular relocation destinations for Californians. The tax savings alone can exceed $1,200/year on a typical salary.

Just 2.5% flat tax — one of the lowest in America. Your $80K salary becomes $63,196 after all taxes.

Gross annual salary

Pay frequency

Filing status

Take-home per paycheck (biweekly)

$2,430.62

Gross pay (annual)$80,000

Deductions (annual)

Federal income tax−$9,049

AZ state tax (2.5%)−$1,635

Social Security (6.2%)−$4,960

Medicare (1.45%)−$1,160

Summary

Annual take-home$63,196

Effective total tax rate21.0%

Effective AZ state rate2.0%

You keep per dollar79 cents

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Arizona Paycheck Calculator 2026 · Updated April 2026

How to Use This Calculator

Tab "Take-Home Pay"

Enter your gross annual salary, pay frequency, and filing status. The calculator deducts federal income tax, Arizona's 2.5% flat state tax, and FICA (Social Security + Medicare). Under "More options," add 401(k) contributions and health insurance premiums to see the impact of pre-tax deductions. You'll see your per-paycheck take-home and an annual summary with your effective tax rate.

Tab "Tax Breakdown"

A visual pie chart showing exactly where your money goes. You'll see four tax slices: federal income tax, AZ state tax, Social Security, and Medicare. The chart highlights that Arizona's 2.5% rate is one of the lowest in the nation — a major draw for workers relocating from high-tax states like California.

Tab "Compare Filing Status"

See how your take-home pay changes across Single vs Married Filing Jointly vs Head of Household. The comparison shows federal tax, AZ state tax, and total take-home for each status so you can see the exact dollar difference. Because AZ uses a flat rate, the state tax difference comes entirely from the standard deduction ($14,600 single vs $29,200 MFJ vs $21,900 HoH).

The Formulas

Federal Income Tax (2026 brackets, progressive):
1. Start with gross annual salary
2. Subtract pre-tax deductions (401k, health insurance)
3. Subtract standard deduction ($15,750 Single / $31,500 MFJ / $23,500 HoH)
4. Apply progressive brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%

Arizona State Tax (flat rate):
AZ taxable income = Gross salary - AZ standard deduction ($14,600 Single / $29,200 MFJ / $21,900 HoH)
AZ tax = AZ taxable income x 2.5%
No local income taxes apply anywhere in Arizona. No state payroll taxes beyond FICA.

FICA (Federal Insurance Contributions Act):
Social Security = 6.2% x min(Gross wages, $184,500)
Medicare = 1.45% x Gross wages
Additional Medicare = 0.9% x max(0, Gross wages - $200,000)

Take-Home Pay:
Net = Gross salary - Federal tax - AZ state tax - Social Security - Medicare - Pre-tax deductions

All figures use 2026 IRS rates: SS wage base $184,500 (SSA), tax brackets from Rev. Proc. 2025-32, TCJA rates made permanent by OBBBA. AZ flat rate per A.R.S. 43-1011, effective since 2023.

Example

Miguel — Software Developer in Scottsdale, Arizona

Filing Single. $80,000/year salary. Paid biweekly (26 paychecks). No pre-tax deductions.

Gross salary (annual)$80,000

Federal income tax-$9,049

AZ state tax (2.5%)-$1,635

Social Security (6.2%)-$4,960

Medicare (1.45%)-$1,160

Annual take-home$63,196

Per paycheck (biweekly)$2,431

AZ taxable income = $80,000 - $14,600 = $65,400. AZ tax = $65,400 x 2.5% = $1,635. Miguel keeps 79.0% of his gross salary. If he lived in California ($80K single), he'd pay roughly $2,900+ in state tax plus SDI — Arizona saves him over $1,200/year in state taxes alone. Combined with no local taxes and lower cost of living, Arizona is one of the top relocation destinations from high-tax states.

Frequently Asked Questions

How did Arizona get to a 2.5% flat tax?▼

Arizona previously had a progressive income tax with rates ranging from 2.59% to 4.5%. In 2021, the legislature passed SB 1828, which established a flat 2.5% rate contingent on state revenue triggers being met. The rate transitioned through 2.98% and then to 2.5% in 2023 after revenue targets were exceeded ahead of schedule. This was partly in response to Proposition 208 (2020), which tried to add a 3.5% surcharge on high earners — the legislature effectively neutralized it by cutting the base rate so the total burden stayed below 4.5%.

Does Arizona have any local income taxes or payroll taxes?▼

No. Arizona does not allow any city, county, or municipality to impose a local income tax. There are also no state-level payroll taxes beyond the standard federal FICA contributions (Social Security and Medicare). This means your take-home pay calculation is identical whether you work in Phoenix, Tucson, Mesa, Scottsdale, Chandler, Flagstaff, or any other Arizona location. The only variable is the flat 2.5% state rate applied to income above the standard deduction.

How does Arizona compare to California for taxes?▼

The difference is dramatic. California has progressive rates from 1% to 13.3%, plus a 1.1% SDI payroll tax. Arizona has a flat 2.5% with no payroll taxes. On an $80,000 salary (single filer), Arizona state tax is about $1,635 compared to California's roughly $2,900+ in income tax plus ~$880 in SDI. That's over $2,100/year more in your pocket in Arizona. Combined with significantly lower housing costs (Phoenix median home price is roughly half of Los Angeles), it's clear why Arizona has been one of the top destinations for California transplants since 2020.

What is the Arizona standard deduction for 2026?▼

Arizona's 2026 standard deduction is $14,600 for single filers, $29,200 for married filing jointly, and $21,900 for head of household. These amounts are subtracted from your gross income before the flat 2.5% rate is applied. Arizona also allows itemized deductions if they exceed the standard deduction. Notable Arizona-specific deductions include contributions to Arizona 529 education plans (up to $2,000 per beneficiary) and charitable contributions to qualifying organizations.

Will Arizona's tax rate stay at 2.5%?▼

The 2.5% flat rate is now established law under A.R.S. 43-1011 and there is no sunset provision. Some Arizona legislators have discussed eventually eliminating the state income tax entirely, following the model of Texas, Florida, and Nevada. However, no concrete legislation has been enacted for further reductions. The state would need to find alternative revenue sources (Arizona already relies heavily on sales tax at 5.6% state rate plus local additions). For now, 2.5% is the rate for the foreseeable future.

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