Arizona Take-Home Pay Calculator (2026)

Arizona has a flat income tax rate of 2.5%, which took effect in 2023 after a multi-year legislative push to consolidate the state's prior bracket system. At 2.5%, Arizona now has one of the lowest state income tax rates in the country among states that do tax wages. For context, neighboring California's top rate is 13.3% and Nevada has no income tax at all.

Before the flat rate, Arizona had a graduated system with a top rate of 4.5%. The move to 2.5% was a significant cut for middle and upper-income earners. A worker earning $80,000 now owes approximately $2,000 in Arizona state income tax, compared to around $3,300 under the old structure.

Arizona does not allow itemized deductions on the state return to the same extent as the federal return, but the standard deduction is adjusted annually for inflation. One quirk: Arizona conforms to federal bonus depreciation rules, which matters more for business owners than wage earners. For W-2 workers, the calculation is straightforward.

Phoenix and other major Arizona cities do not levy a local income tax, so the 2.5% flat rate is the entirety of state and local income tax for most residents. The combination of a low flat rate, no local income taxes, and no estate tax makes Arizona one of the more tax-friendly states for workers in most income ranges.