Arkansas has cut its income tax repeatedly in recent years; the top rate is now just 3.9%, reached at about $25,700 of income, so the state takes a relatively small bite even though it is technically graduated.
With a low top rate and a string of cuts behind it, Arkansas is one of the lighter-tax states in the region. Here is how the rate works on your paycheck. See your exact take-home with the free Arkansas paycheck calculator.
How Arkansas's income tax works
Arkansas applies graduated rates that climb to a 3.9% top rate, reached at $25,700 of net taxable income, after a standard deduction ($2,410 single / $4,820 married). Because the top rate is low and starts fairly early, a typical worker pays close to 3.9% on their last dollars but a lower effective rate overall. There is no local income tax.
Arkansas has steadily lowered its top rate in recent years, from 4.9% down through 4.7% and 4.4% to 3.9%, so the state portion keeps shrinking.
| Taxable income | Rate |
|---|---|
| $0 – $5,500 | 0% |
| $5,500 – $15,600 | 2% – 3% |
| $15,600 – $25,700 | 3.4% |
| Over $25,700 | 3.9% |
Your take-home on a $65,000 salary in Arkansas
Here is how a $65,000 salary breaks down for a single filer, using 2025 federal and FICA figures alongside Arkansas's graduated rates topping out at 3.9%.
| Item | Annual |
|---|---|
| Federal income tax | $5,246 |
| FICA (Social Security + Medicare) | $4,973 |
| Arkansas income tax | $2,031 |
| Take-home pay | $52,751 |
| Percent of gross kept | 81.2% |
On a $65,000 salary a single filer owes about $2,031 in Arkansas income tax, an effective rate near 3.1%, and keeps roughly $52,751, or 81.2% of gross. That take-home stretches well in Arkansas, which has among the lowest costs of living in the country in metros like Little Rock, Fayetteville, and Fort Smith. Compare with Tennessee.
A low top rate that keeps getting cut
Arkansas's story is its rapid rate-cutting: the top rate has fallen from nearly 5% to 3.9% in just a few years, with lawmakers signaling more cuts to come. The graduated brackets matter little once you pass roughly $25,700, where the 3.9% rate takes over.
Arkansas does not tax Social Security and exempts a portion of retirement income, so retirees typically pay below the rate that applies to wages.
How to keep more of your Arkansas paycheck
Because Arkansas starts from a federal-style base, a traditional 401(k) and HSA lower your Arkansas and federal taxable income together (and the HSA also avoids FICA), the simplest way to push your take-home a little higher.