Arizona paychecks in 2026: what changed
Arizona's income tax rate is unchanged for 2026; the minimum wage went up.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- Income tax rate: still 2.5%, a flat rate. A-4 choices run from 0.5% to 3.5%, with 2.0% if no A-4 is on file.
- Minimum wage: $15.15 (up from $14.70); tipped at least $12.15.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 Arizona paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- Arizona Department of Revenue — Form A-4, Employee's Arizona Withholding Election (2026) — 0.5%–3.5% choices; extra amount; 0% election; 2.0% if no A-4; gross taxable wages = W-2 box 1
- Arizona Department of Revenue — Employer's Instructions for Form A-4 (2026) — default 2.0%; new employees complete A-4 within 5 days; gross taxable wages follow the federal definition
- Arizona Department of Revenue — Withholding Calculations — 2.5% tax rate for 2023 and beyond; worked example $2,000 × 2.5% = $50.00 + $4.55 extra
- Arizona Department of Economic Security — Who pays unemployment taxes? — employers pay; first $8,000 of each employee's wages
- A.R.S. § 23-735 — No deduction from wages to finance employer contributions
- Industrial Commission of Arizona — New 2026 Minimum Wage — $14.70 → $15.15 on January 1, 2026
- A.R.S. § 23-363 — Minimum wage; tipped employees — up to $3.00 less for tipped employees; yearly cost-of-living increase
- City of Tucson — Tucson Minimum Wage Act — $15.45 for 2026; tip credit up to $3.00
- City of Flagstaff — Minimum Wage — $18.35 from January 1, 2026; full minimum wage regardless of tips
- U.S. Department of Labor — Overtime pay — time-and-a-half over 40 hours in a workweek (FLSA)
- A.R.S. § 23-351 — Paydays — two or more paydays a month, no more than 16 days apart
- A.R.S. § 23-353 — Final pay
- A.R.S. § 23-356 — Wage claims — up to $12,000, within one year
- Industrial Commission of Arizona — Labor Department (wage claims)