Calculating your take-home pay in the Grand Canyon State involves subtracting federal taxes, FICA contributions, and Arizona's state-specific income tax from your gross earnings. Arizona transitioned to a flat tax system in 2023, which significantly simplifies the state-level calculation.
The Arizona Flat Tax Rate
As of recent tax law changes, Arizona utilizes a flat income tax rate of 2.5%. Unlike states with progressive brackets where you pay more as you earn more, every dollar of taxable income in Arizona is taxed at the same percentage. This makes Arizona one of the more tax-friendly states for high earners in the Southwest.
Federal Tax Deductions
Even though Arizona has a flat tax, your federal taxes are still progressive. The calculator accounts for:
Federal Income Tax: Based on the 2024 IRS tax brackets and your filing status.
FICA: A combined 7.65% deduction (6.2% for Social Security and 1.45% for Medicare).
Standard Deduction: The tool automatically applies the federal standard deduction ($14,600 for single and $29,200 for married filers in 2024) to estimate your taxable income.
Example: Earning $60,000 in Arizona
If you earn a gross annual salary of $60,000 as a single filer in Arizona:
Gross Monthly: $5,000
FICA (7.65%): -$4,590 annually
Arizona State Tax (2.5%): -$1,500 annually
Federal Tax (Estimated): ~$5,100 annually
Net Annual Take-Home: ~$48,810 (Approx. $4,067 per month)
Note: This calculator provides estimates based on standard deductions and flat rates. Actual results may vary based on pre-tax contributions (like 401k or health insurance) and specific tax credits.