How Arizona Taxes Your Paycheck
Arizona made an aggressive move in 2023, collapsing a multi-bracket progressive tax into a flat 2.5% — the lowest flat-rate state income tax in the country. A single filer earning $80,000 in 2026 pays about $1,625 in Arizona income tax — roughly 2% of gross. Among states with an income tax, the effective burden is hard to beat.
The 2.5% is the entire wage tax. Arizona has no city, county, or local income tax. Phoenix, Tucson, Mesa, and Scottsdale workers all pay the same flat rate. There is no SDI or paid family leave program at the state level. The state line on your paystub is the entire state-side wage tax bill.
Standard deduction matches federal. Arizona's standard deduction is set to track the federal — $16,100 single in 2026. Combined with the 2.5% rate, an Arizona paycheck is one of the cleanest in the country to model: federal income tax, FICA, federal pre-tax adjustments, then 2.5% × (wages − federal-style deductions).
Property tax is below average. Arizona's effective property tax rate (about 0.51%) is among the lowest in the country. On a median Phoenix-metro home (~$425,000), that's roughly $2,170/yr. Tucson and outer-metro markets run lower still.
Sales tax is layered. State sales tax (called Transaction Privilege Tax) is 5.6%, but most cities add 1.5%–2.5%. The combined Phoenix rate is 8.6%; Mesa and Tucson run similar. Groceries are exempt at the state level (most cities exempt them too, but not all).
Demographic and industry mix. Arizona is one of the fastest-growing states in the country, driven by retiree migration to the Valley of the Sun and the Tucson area, plus a rising semiconductor presence (TSMC's Phoenix fab, Intel's Chandler operations). The economy spans aerospace, healthcare, tourism, and a growing tech corridor along the Phoenix–Scottsdale axis.
For wage earners, Arizona is one of the most paycheck-friendly income-tax states in the country. The 2.5% flat rate, federal-conforming standard deduction, and no local layer make the state tax bill small and easy to predict. The trade-off is sales tax and Phoenix-area property values that have climbed sharply over the past decade.
Top Cities in Arizona
The largest population centers in Arizona:
- Phoenix — 1,650,000 residents
- Tucson — 547,000 residents
- Mesa — 511,000 residents
- Chandler — 281,000 residents
How Arizona Compares to Neighboring States
Single-filer take-home on a $75,000 annual salary in 2026, federal + state income tax + FICA only:
| State | Take-Home | vs. Arizona |
|---|---|---|
| Arizona (here) | $60,093 | — |
| California | $58,652 | -$1,441 |
| Nevada | $61,593 | +$1,500 |
| Utah | $58,180 | -$1,913 |
| New Mexico | $59,182 | -$911 |
| Colorado | $58,953 | -$1,140 |
Take-home reflects single filer, no pre-tax deductions; SDI/PFML and local taxes excluded for an apples-to-apples comparison.
Frequently Asked Questions
What's the Arizona state income tax rate?
Arizona has a flat income tax rate of 2.5% for 2026. Whether you earn $40,000 or $200,000, your state tax rate is the same — applied to your taxable income after the standard deduction.
How much is taken out of my paycheck in Arizona?
For a single filer earning $75,000 in Arizona (2026), expect roughly $7,670 in federal income tax, $5,738 in FICA, and $1,500 in Arizona state tax — leaving about $60,093 take-home (19.9% effective tax rate). SDI/PFML and local taxes (if any) come out of that as well.
Is the Arizona median household income enough to live comfortably?
The 2023 ACS reported a Arizona median household income of about $81,500. Whether that's "comfortable" depends heavily on city — Phoenix cost of living can differ substantially from rural areas. Use the calculator above to model your specific salary and deductions.
How does this Arizona paycheck calculator work?
We calculate your annualized gross pay based on the pay frequency you select, then apply the 2025 or 2026 IRS percentage method for federal income tax, the Arizona state tax schedule (if any), Social Security, and Medicare. Pre-tax deductions like 401(k) and Section 125 health premiums reduce your taxable base before withholding is computed. You can switch between salary and hourly modes; hourly mode applies time-and-a-half to hours over 40/week prorated by pay period.