Arizona has a flat 2.5% income tax, one of the lowest rates of any state that taxes income at all. Every worker pays the same 2.5%, with no brackets to climb.
Arizona consolidated its old graduated brackets into this single low rate in 2023, and it pairs the rate with a standard deduction that matches the generous federal amount. Here is how little it takes out of a typical paycheck. See your exact take-home with the free Arizona paycheck calculator.
How Arizona's income tax works
Arizona applies a flat 2.5% to your income after a standard deduction that conforms to the federal one ($15,750 single / $31,500 married for 2025). There are no brackets and no local income tax, so your state tax is simple and low at any salary.
Because the rate is so low and the deduction so large, Arizona's effective rate for a typical worker lands under 2%. The state moved to this flat 2.5% in 2023, down from a graduated system that topped out at 4.5%.
Your take-home on a $65,000 salary in Arizona
Here is how a $65,000 salary breaks down for a single filer, using 2026 federal and FICA figures alongside Arizona's a flat 2.5% income tax.
| Item | Annual |
|---|---|
| Federal income tax | $5,620 |
| FICA (Social Security + Medicare) | $4,973 |
| Arizona income tax | $1,231 |
| Take-home pay | $53,176 |
| Percent of gross kept | 81.8% |
On a $65,000 salary a single filer owes only about $1,231 in Arizona income tax, an effective rate near 1.9%, and keeps roughly $53,176, or 81.8% of gross, among the highest take-home rates of any income-tax state. In Phoenix, Tucson, and Mesa, that low tax helps offset housing costs that have risen as people move in from California. Compare with California.
Arizona's take-home pay across salaries
Estimated annual take-home for a single filer at common salaries, using 2026 federal and FICA figures alongside Arizona's a flat 2.5% income tax. Open the Arizona paycheck calculator to add a 401(k), HSA, or a different filing status.
| Annual salary | Take-home pay | % kept |
|---|---|---|
| $40,000 | $33,714 | 84.3% |
| $60,000 | $49,284 | 82.1% |
| $80,000 | $63,504 | 79.4% |
| $100,000 | $77,074 | 77.1% |
| $150,000 | $110,435 | 73.6% |
One of the lowest flat rates in the nation
Arizona's distinctive feature is simply how low and flat the rate is: 2.5% on everything, after a federal-sized deduction. Compared with neighboring California, where a similar earner faces a marginal rate several times higher plus SDI, Arizona's take-home advantage is dramatic.
Arizona does not tax Social Security benefits and taxes other retirement income at the same low 2.5%, so retirees keep a large share of their income too.
How to keep more of your Arizona paycheck
Arizona's rate is already low, but a traditional 401(k) and HSA still trim your Arizona and federal taxable income together (and the HSA avoids FICA), so maxing them mostly boosts your federal savings while nudging the small state bill lower.