Arizona makes paycheck withholding simple compared to federal taxes. Instead of brackets, the state uses flat percentages chosen on Form A-4—from 0.5% up to 3.5%. If you don’t submit the form, the default rate is 2.0%. Calculating withholding manually just means multiplying your gross taxable wages by your elected percentage and dividing by your pay periods. In this guide, you’ll see the exact steps, examples, and quick tables so you can confirm your Arizona state tax withholding by hand.
Arizona Withholding at a Glance
Arizona uses a flat percentage system for state income tax withholding. Employees choose a rate on Form A-4 (ranging from 0.5% to 3.5%) that is applied to gross taxable wages.
If no A-4 is submitted, employers withhold at the default 2.0% rate. Unlike federal taxes, Arizona doesn’t use progressive tax brackets, so manual calculation is straightforward.
➡ For quick estimates, try the Arizona paycheck tax calculator or the Arizona paycheck deductions calculator.
Step-by-Step: Manual Calculation
1. Find Gross Taxable Wages
Start with your gross pay for the period, minus any pre-tax deductions (like health insurance, 401(k) contributions). This is your gross taxable wages, shown in Box 1 of your W-2.
2. Identify Your Withholding Rate
Check your Form A-4. Options are: 0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, or 3.5%.
- If no form is filed → 2.0% default applies.
3. Multiply Wages by Withholding Rate
Apply your chosen percentage.
Example: $3,000 taxable wages × 2.5% = $75 withheld.
4. Adjust for Pay Period
If the rate is annualized, divide by pay periods:
- Monthly (12) → $900 ÷ 12 = $75 per paycheck
- Bi-weekly (26) → $900 ÷ 26 ≈ $34.60 per paycheck
Quick Reference Table
| Gross Taxable Pay | Withholding Rate | State Tax Per Paycheck (Monthly) |
|---|---|---|
| $2,500 | 2.0% (default) | $50 |
| $3,000 | 2.5% | $75 |
| $4,000 | 3.5% | $140 |
Why Manual Calculation Matters
- Transparency: Know exactly how much should be withheld.
- Accuracy: Avoid surprises at tax time by checking paystubs.
- Control: Use Form A-4 to adjust rates and better match your yearly tax liability.
FAQs: Arizona Withholding
Q: What is the default Arizona withholding rate?
A: 2.0% if you don’t submit Form A-4.
Q: Can I choose any rate?
A: Yes, between 0.5% and 3.5%, using Form A-4.
Q: What are gross taxable wages?
A: Wages after subtracting pre-tax deductions like health premiums or retirement contributions.
Q: Does Arizona use tax brackets like federal withholding?
A: No, it’s a flat percentage system.
Q: Can I add extra withholding?
A: Yes, Form A-4 allows you to request additional flat amounts per paycheck.
Harry is the creator of ArizonaPaycheckCalculator.com, a trusted resource for accurate and easy-to-use payroll and tax calculators. With a focus on clarity and precision, Harry helps Arizona residents understand their take-home pay, deductions, and withholdings. Dedicated to making complex calculations simple, he combines financial knowledge with user-friendly tools to save users time and confusion.