# Arizona pay stubs: flat income tax and A-4 withholding choices

> Arizona has a flat 2.5% income tax for 2026, and employees choose their withholding percentage on Form A-4. See what an Arizona pay stub includes.

Source: https://www.paystubnest.com/states/arizona
State: Arizona (AZ)
Published: 2026-09-25
Last reviewed: 2026-10-12
Publisher: PayStubNest.com

## Short answer

Arizona withholds state income tax from wages, and the state's income tax is a flat 2.5% for 2026. Instead of an allowance-based formula, each employee picks a withholding percentage of gross pay on Form A-4 (from 0.5% to 3.5%), or can elect zero if they expect no Arizona tax. Federal income tax, Social Security and Medicare are also withheld. Arizona has no local income taxes and no state disability deduction.

## State income tax

For 2026 Arizona has a flat income tax of 2.5% of Arizona taxable income, a rate that has applied since tax year 2023. Withholding works differently here than in most states. Rather than running a formula based on allowances, Arizona asks each employee to choose a **percentage of gross taxable wages** on **Form A-4**. The 2026 form offers choices from 0.5% to 3.5% in half-point steps. An employee who expects to owe no Arizona tax for the year can elect a zero rate, and employees can also ask for an extra fixed amount each paycheck.

Because the employee picks the percentage, two people with the same pay can have different Arizona withholding. That is normal, not an error. When a new hire does not turn in an A-4, the employer uses the state's default rate, so collect the form early.

## Other state payroll deductions

Arizona has no state disability insurance program, no state paid family leave payroll deduction, and state unemployment insurance is paid by employers. For most workers, the only Arizona line on the stub is state income tax.

## Local taxes

Arizona cities and counties do not tax wages, so there is no local income tax line on an Arizona pay stub.

## Federal withholding still applies

The federal side of an Arizona pay stub has three standard lines:

1. Federal income tax, calculated from the answers on Form W-4.
2. Social Security at 6.2%, which stops once year-to-date wages reach the annual Social Security wage base.
3. Medicare at 1.45% with no cap, plus 0.9% Additional Medicare Tax on wages over $200,000 for the year.

## Creating an Arizona pay stub with PayStubNest

In PayStubNest, select Arizona as the state, then add the pay details: hours for hourly workers or a salary for salaried staff. The exact figures depend on pay, pay frequency, W-4 choices, deductions and year-to-date totals, and PayStubNest calculates all of it automatically, handling the federal and state withholding and carrying year-to-date totals from stub to stub. Check the preview at no cost, and pay only when you are ready to download. Start at [/app/new](https://www.paystubnest.com/app/new).

## Record-keeping tip

Keep a copy of each employee's latest Form A-4 with your payroll records and note the date it took effect. If the withholding percentage changes midyear, that note explains the change on later stubs. Forms and rate details are on the [Arizona Department of Revenue](https://azdor.gov/) website.