Unlike most states with tiered brackets, Arizona applies a single flat rate of 2.5% to all taxable income regardless of how much you earn. The state first subtracts its own standard deduction ($13,850 single, $27,700 married), then applies 2.5% to everything above that. No brackets to climb, no marginal rate jumps. Arizona has no municipal income taxes on top of the state rate.
Arizona's minimum wage is $14.35/hr as of January 1, 2025. It adjusts annually based on the Consumer Price Index.
Arizona has no state disability insurance (SDI) and no local payroll taxes. The only state-level line item on an Arizona paycheck stub is the 2.5% flat income tax. Federal FICA withholding applies at standard rates: Social Security at 6.2% (up to the $176,100 wage base) and Medicare at 1.45% (plus 0.9% on income above $200,000).
If you work as a freelancer or contractor in Arizona, you pay self-employment tax (15.3% on net self-employment income) in addition to the state flat rate. The Self-Employment Tax Calculator shows what you owe and the deductible half.
Single filing status, standard deductions only. No 401(k) or pre-tax benefit deductions included. Arizona's flat rate keeps state tax to $1,500 at this income level.
| Deduction | Annual | Monthly |
|---|---|---|
| Gross Salary | $60,000 | $5,000 |
| Federal Income Tax | −$5,162 | −$430 |
| Arizona State Tax (2.5%) | −$1,500 | −$125 |
| Social Security (6.2%) | −$3,720 | −$310 |
| Medicare (1.45%) | −$870 | −$73 |
| State Disability (SDI) | None | None |
| Estimated Take-Home | $48,748 | $4,062 |
California applies a progressive schedule with rates reaching 9.3% above $66,295. At $60,000 gross, an Arizona worker pays about $1,500 in state income tax while a California counterpart pays roughly $1,900, a modest gap. The difference becomes substantial at higher incomes: at $100,000 Arizona workers keep approximately $3,850 more per year, and at $150,000 the gap reaches $7,600 in state taxes alone.
For workers considering a relocation from California to Arizona, these numbers compound quickly. A $150k earner saves over $630 per month just on state income tax. Use the California Paycheck Calculator to run the exact comparison on your salary.
Arizona replaced its graduated bracket system with a flat 2.5% rate in January 2023, cutting the previous top rate of 8% in a single legislative session under HB 2871. Workers who were Arizona residents before the change and earn above $100,000 saw their state tax bill drop by $4,000 or more per year with no action required on their part. The employer withholding tables updated automatically.
If you joined an Arizona employer after January 2023, the 2.5% rate is all you have ever seen. If you moved to Arizona from California or another high-tax state, your effective income tax burden likely fell significantly. The Nevada Paycheck Calculator shows what a no-income-tax comparison looks like if you are weighing both options.