Arizona variant. This is a Arizona-specific version of the Payroll Tax Estimator (Flat Rate), using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Payroll Tax Estimator (Flat Rate).
Arizona employers owe federal payroll taxes (Social Security, Medicare, FUTA) plus state obligations (state income tax withholding and SUTA).
Payroll tax obligations in Arizona
Employers match the 6.2% Social Security and 1.45% Medicare withheld from employees, and pay FUTA (0.6% on the first $7,000 after credits) plus state unemployment insurance.
Arizona also requires state income tax withholding (Flat 2.5% as of 2023).
About taxes and housing in Arizona
Arizona uses a flat individual income tax of 2.5%, one of the lowest flat rates in the nation.
Arizona keeps property taxes relatively low and limits how much a primary residence's taxable value can rise each year.
Arizona's economy is driven by technology, tourism, and rapid population growth, with a warm climate that attracts retirees and remote workers.
Worked example: employer cost on $74,568
On a $74,568 salary, the employer's FICA match alone is 7.65% = $5,704, before FUTA and Arizona unemployment insurance.
Quick reference
- State income tax: Flat 2.5% as of 2023
- State sales tax: 5.6% (plus 2.80% avg local)
- Median home value: $425,000
- Median household income: $74,568
- Effective property tax rate: 0.51%
- Avg auto insurance: $1,812/yr
Frequently Asked Questions
What payroll taxes do Arizona employers pay?
Employer FICA match (7.65%), FUTA, state unemployment, and state income tax withholding.
What is the employer FICA match?
Employers match 6.2% Social Security + 1.45% Medicare = 7.65% of wages.