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Arizona Payroll, Unique Aspects of Arizona Payroll Law and Practice

The Arizona State Agency that oversees the collection and reporting of state income taxes deducted from payroll checks is:

revenue Department

1600 W. Monroe St.

post office box 29009

Phoenix, Arizona 85038-9009

602-255-2060 or 800-843-7196


Arizona requires that you use the Arizona form “A-4, Arizona Employee Withholding Percentage Election” instead of a federal form W-4 for Arizona state income tax withholding.

Not all states allow salary reductions made under Section 125 or 401(k) cafeteria plans to be treated in the same manner as the IRS code allows. In Arizona, cafeteria plans and 401(k)s are not taxable for income tax purposes and are not taxable for unemployment purposes.

There is no provision in Arizona payroll law regarding supplemental wage tax rates.

You can file your Arizona W-2 forms magnetically if you wish.

The Arizona State Unemployment Insurance Agency is:

Department of Economic Security

Unemployment Tax Division

post office box 6028

SAT Code 911B

Phoenix, Arizona 85005


The state of Arizona taxable wage base for unemployment purposes is wages up to $7,000.00. Which means that unemployment tax will only be calculated on the first $7000.00 of an employee’s salary each year.

Arizona Magnetic Media Reports of Quarterly Wage Reports are optional.

Unemployment records must be kept in Arizona for a minimum period of four years. This information generally includes: name; Social Security number; hire, retirement and termination dates; wages per period; payroll periods and payment dates; termination date and circumstances.

The Arizona State Agency charged with enforcing state wage and hour laws is:

work Department

post office box 19070

Phoenix, Arizona 85005-9070



There is no general minimum wage provision in the State of Arizona.

There is also no general provision in Arizona State Law that covers overtime pay at an employer that is not covered by the FLSA.

The state of Arizona’s new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the elements required by the federal government of:

  • Name of the employee
  • employee address
  • Employee Social Security Number
  • Name of the employee
  • Employee Address
  • Employer Federal Employer Identification Number (EIN)

This information must be reported within 20 days of hire or rehire.

Information can be submitted as W4 or equivalent by mail, fax or electronically.

There is no penalty for a late report in Arizona.

You can contact the Arizona New Hire Reporting Agency by calling 888-282-2064 / 602-340-0555 or on the web at

Arizona does not allow mandatory direct deposit.

Arizona requires the following information on an employee’s pay stub:

Earnings and deductions if the employee pays by direct deposit. information.

In Arizona, the payment frequency is bi-weekly within 16 days of each other; FLSA-exempt employees may be paid monthly by an out-of-state employer.

The time lag between the time services are rendered and the time the employee is due to be paid is five days after the pay period (10 days if the payroll system is out of state); 16 days for exception or overtime pay.

Arizona payroll law requires involuntarily terminated employees to receive their final pay within 3 business days and voluntarily terminated employees to receive their final pay by the next regular payday or by mail if requested by the employee.

Wages of the deceased employee up to a maximum of $5000.00 must be paid to the surviving spouse after an affidavit is filed showing the death of the employee and the status of the surviving spouse.

Reversal laws in Arizona require unclaimed wages to be paid to the state after one year.

In addition, Arizona requires the employer to keep a record of wages abandoned and turned over to the state for a period of five years.

There is no provision in Arizona law regarding tip credits against the state minimum wage.

There is no provision in Arizona payroll law that covers required meal or rest periods.

There is no provision in Arizona law regarding the retention of wage and hour records, so it is probably wise to follow the FLSA guidelines.

The Arizona agency charged with enforcing child support laws and orders is:

Division of Child Support Enforcement

3443 N. Central Ave., 4th Floor.

Phoenix, Arizona 85012


Arizona has the following provisions for child support deductions:

  • When to start withholding? 14 days after receiving the order.
  • When to send the payment? Within 2 days of payment day.
  • When to send a termination notice? Within 10 days of termination.
  • Maximum administrative fee? greater than $4 per month. or $1 per pay period.
  • Retention limits? 50% of earnings available

Please note that this article is not updated for changes that may and will occur from time to time.

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