Methodology

We explain exactly how Arizona Paycheck Calculator tools estimate take-home pay, taxes, and employer costs. Our goals are transparency, repeatability, and practical accuracy for Arizona workers and small employers.

1) What our calculators cover

Pay types: hourly, salary, overtime, shift premiums, commissions, bonuses/supplemental wages.
Deductions: pre-tax (401(k)/403(b)/457(b), HSA/FSA, pre-tax insurance), post-tax (after-tax insurance, union dues, garnishments you enter).
Taxes modeled: Federal income tax (current W-4 rules), Social Security & Medicare (FICA), Arizona A-4 state withholding.
Outputs: per-pay net pay, tax breakdown, marginal vs effective tax rate, and optional employer cost view (employer-side FICA/FUTA/SUTA).
No local income tax: Arizona has no city income tax; none is modeled.

2) Primary sources we track

IRS: Form W-4 (current), Publication 15-T (withholding methods and parameters), wage base limits, Additional Medicare thresholds, supplemental wage guidance.
Arizona Department of Revenue (AZ DOR): Form A-4 withholding percentage options and current state guidance.
Federal contribution limits for retirement plans and HSAs/FSAs.

We refresh parameters when official updates are released.

3) Calculation flow (high level)

Gross pay (per pay period)
- Salary: annual_salary ÷ pay_periods.
- Hourly: (regular_hours × hourly_rate) + (OT_hours × OT_rate) + shift/premium pay.
- Overtime default: 1.5× regular rate (editable).
- Bonus/supplemental: either combined with regular wages or calculated separately (see §6).
Pre-tax deductions
Subtracted before tax where applicable: retirement (401(k)/403(b)/457(b)), HSA/FSA, pre-tax medical/dental/vision, transit/parking.
These lower FIT, FICA (plan-specific), and AZ A-4 wage bases.
FICA
- Social Security: employee rate × wages up to the annual wage base (we cap automatically as YTD progresses).
- Medicare: employee rate on all wages; Additional Medicare 0.9% applies to wages over the filing-status threshold (employee portion only).
Federal income tax (FIT) — current W-4 method (see §5).
Arizona state withholding — employee’s A-4 percentage × AZ-taxable wages (see §7).
Post-tax deductions — after taxes: after-tax insurance, dues, garnishments you enter.
Net pay Net = Gross − Pre-tax − (FICA + FIT + AZ withholding) − Post-tax

4) Pay frequency & periodization

Supported: weekly, bi-weekly, semi-monthly, monthly, annual (test).

Salary is divided by periods; hourly pay is built from hours × rates.
Where the IRS requires annualization, we annualize → apply thresholds/credits → de-annualize to the period per Pub. 15-T.

5) Federal income tax method (W-4, post-2020)

We implement the current W-4 framework (no “allowances”):

Inputs: filing status; Step 2 (multiple jobs); Step 3 dependents credit; Step 4(a) other income; Step 4(b) deductions; Step 4(c) extra withholding.
Method: IRS percentage/computational method from Pub. 15-T, tuned to the selected pay frequency.
Dependents credit: annual credit is applied in the annualized step, then apportioned to the period.
Multiple jobs (Step 2): handled per IRS rules (checkbox/estimator logic); large accuracy gains when users reflect all active jobs.

Supplemental wages (federal):

If treated separately, we apply the current flat supplemental rate to the bonus/commission portion, then combine with FICA and AZ A-4 (see §6).
If treated combined, we add the supplemental amount to regular wages and run the normal W-4 method.

6) Supplemental/bonus pay options

We offer two realistic approaches:

Separate check (typical):
- FIT at the federal flat supplemental rate.
- FICA applied as usual (subject to wage base).
- AZ A-4 percentage applied to the supplemental taxable wages.
Combined with regular payroll: flows through normal FIT and AZ withholding methods based on total period wages.

You can switch between these modes to mirror your employer’s practice.

7) Arizona A-4 state withholding

Employees select a percentage on A-4.
We apply that percentage to AZ-taxable wages after pre-tax deductions and FIT adjustments where appropriate.
If A-4 is 0% (allowed in some cases), AZ withholding is modeled as zero.
No Arizona city income tax is added.

8) Benefits & deduction handling

Pre-tax lowers taxable wages for FIT and AZ; FICA treatment depends on the plan (e.g., 401(k) reduces Social Security/Medicare wages; some benefits may not).
Post-tax occurs after tax computation.
Annual caps: for retirement and HSA/FSA we show fields/YTD so you can avoid exceeding the official limits. The calculator does not force-stop contributions unless you enable YTD tracking and caps.

9) Overtime, shift, PTO & special pay

Overtime: default 1.5×; double-time can be entered.
Shift/premium pay: add as extra hourly earnings.
PTO/vacation/sick payout: you choose to treat as regular or supplemental (separate) pay.

10) Rounding & precision

We compute internally at high precision, then display to the nearest cent.
Payroll providers may round at intermediate steps; tiny differences vs your actual check are normal.

11) Net-to-gross (reverse) solver

For tools that solve target net → required gross, we use a fast monotonic binary search across the feasible gross range.

The solver iterates through the full tax/deduction pipeline until the modeled net is within a small tolerance of your target.
If no exact solution exists (e.g., constraints too tight), we return the closest feasible value and indicate the tolerance.

12) YTD awareness

You can enter year-to-date wages/withholding for better accuracy near caps (Social Security wage base, contribution limits).
When YTD is provided, we adjust remaining per-pay calculations to avoid over-withholding where rules require.

13) Limitations & assumptions (read me)

Outputs are educational estimates. Actual payroll depends on your employer’s system, rounding, timing, and plan documents.
We do not automatically model every edge case (examples: clergy rules, nonresident alien tables, third-party sick pay, cafeteria plan nuances, S-corp shareholder specifics).
Garnishments and court-ordered deductions vary by jurisdiction; we only model amounts you enter.
Multi-job accuracy depends on properly setting W-4 Step 2 (or modeling jobs separately).
Contribution caps/thresholds change; verify your YTD entries.

See our Disclaimer for more.

14) Data, privacy & performance

Calculations run client-side in your browser.
We do not store the numbers you type.
Optional “share state” may encode your inputs in the URL hash on your device; clear it any time.
We prioritize accessibility (labels, keyboard flow, contrast) and fast load (minimal scripts, lazy assets).

For full details, see our Privacy Policy.

15) Quality assurance & updates

Parameter updates (IRS wage base, Additional Medicare thresholds, A-4 options) are applied when official changes publish.
Unit tests cover rate application, thresholds, caps, and reverse-solver behavior.
Manual spot checks verify realistic pay stubs across pay frequencies and income bands.
Each release receives a version bump and changelog entry.

16) Worked example (semimonthly salary with 401(k) & medical)

Gross: $72,000 ÷ 24 = $3,000.
Pre-tax: 401(k) 5% = $150; medical pre-tax $120; taxable wages now $2,730.
FICA: SS and Medicare on $2,730 (SS capped annually; Medicare unlimited).
FIT: Apply W-4 method for semimonthly using filing status, Step 2/3/4 inputs.
AZ A-4: Apply elected % to AZ-taxable wages for the period.
Post-tax: Any after-tax items you entered.
Net pay: Gross − pre-tax − (FICA + FIT + AZ) − post-tax.

(Exact amounts depend on current official parameters and your W-4/A-4 selections.)

17) Changelog (summary)

[3-2025] — Updated IRS wage base and Pub. 15-T values; confirmed AZ A-4 options; tuned reverse-solver tolerance.
[4 2025] — Added overtime presets and employer-cost breakdown.
[5 2025] — Minor rounding alignment with common payroll systems.

18) Contact

Questions, corrections, or edge-case requests?

Email: [contact@arizonapaycheckcalculator.com]