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PaycheckDesk

Arizona · tax year 2026

Does Arizona tax tips and overtime?

Neither deduction reduces your state tax.

Arizona charges a flat 2.5% on federal AGI less a standard deduction set equal to the federal one. Neither federal deduction reduces Arizona tax — both are taken below adjusted gross income, which is where Arizona starts. Arizona has no local income tax, so this is the whole state-level picture.

What it means on a real paycheck

Take a single filer earning $50,000 a year, $8,000 of it in tips. Against the same person with no tips to declare, the federal deduction is worth $960.

In Arizona it is worth nothing extra. The state bill is identical either way, so $960 is the whole of it.

How Arizona works out the tax

Arizona charges a flat 2.5%, after a standard deduction of $16,100 single or $32,200 filing jointly. It begins from your federal adjusted gross income and applies its own reliefs from there.

Your own numbers

Your gross pay before any taxes or deductions.

Married filing separately cannot claim these deductions at all, so it is not offered here.

Traditional, pre-tax. Lowers income tax but not Social Security or Medicare.

Pre-tax cafeteria-plan premiums. These lower income tax and FICA.

Take-home pay per paycheck (26 per year)

$1,956

$50,850 a year after taxes and deductions.

Arizona charges a flat 2.5% on federal AGI less a standard deduction set equal to the federal one. Neither federal deduction reduces Arizona tax — both are taken below adjusted gross income, which is where Arizona starts. Arizona has no local income tax, so this is the whole state-level picture. See what that costs you →

Where the money goes each year

Gross salary$62,000
Federal income taxTop rate applied: 12%−$5,260
Social Security−$3,844
Medicare−$899
State income tax (AZ)Flat 2.50% on $45,900 of state taxable income−$1,148
Take-home pay$50,850

Per paycheck

Gross$2,385
Taxes withheld−$429
Net$1,956

Estimate for tax year 2026 assuming the standard deduction, no dependents or credits, and even pay across the year. Your employer withholds using your Form W-4, so an individual paycheck can differ. Effective total tax rate: 17.98%. Not tax advice.

Where these figures come from

Arizona’s rates and reliefs here were taken from Arizona’s own publication and last checked on 2026-08-01. A state appears in this calculator only once its figures have been read off that state’s own paperwork and covered by tests — never estimated, and never copied from another site.

Figures on this page are for tax year 2026 and were last checked against the primary sources on 2026-07-31. See our sources. This is an estimate, not tax advice.

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