Payroll Arizona, unique aspects of Arizona payroll law and practice

The Arizona State Agency, which oversees the collection and reporting of state income taxes withheld from paychecks, is:

revenue department

1600 West Monroe St.

PO Box 29009

Phoenix, AZ 85038-9009

602-255-2060 or 800-843-7196


Arizona requires that you use an Arizona Form A-4, Employee’s Arizona Withholding Percentage Election instead of a Federal W-4 Form for Arizona State Income Tax Withholding.

Not all states allow pay cuts under Section 125 of the Cafeteria Plans or 401(k) to be treated in the same manner as the IRS Code allows. In Arizona, cafeteria plans and 401(k) plans are not taxable for income tax purposes and are not taxable for unemployment purposes.

The Arizona Employment Tax Code does not contain a provision for supplemental employment tax rates.

You may submit your Arizona State W-2s on magnetic media if you wish.

The Arizona State Unemployment Insurance Agency is:

Department of Economic Security

Unemployment Tax Department

PO Box 6028

SAT code 911B

Phoenix, AZ 85005


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

Quarterly Arizona magnetic media salary reporting is optional.

Unemployment records must be kept for at least four years in Arizona. This information generally includes: name; social security number; dates of employment, reinstatement and termination; wages by period; payroll periods and payment dates; Date and Circumstances of Termination.

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

work department

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PO Box 19070

Phoenix, AZ 85005-9070



The state of Arizona does not have a general minimum wage requirement.

Also, there is no general provision in Arizona state law that covers overtime pay from a non-FLSA covered employer.

Arizona’s new hire reporting requirement requires every employer to report all new hires and rehires. The employer must report the federally required elements of:

  • Name of the employee
  • address of the employee
  • Employee’s social security number
  • Name of employer
  • Employer’s Address
  • Employer’s Federal Employer Identification Number (EIN).

This information must be reported within 20 days of hiring or reinstatement.

Information may be submitted as W4 or equivalent by mail, facsimile or electronically.

There is no penalty for late reporting in Arizona.

The Arizona New Hire Registration Authority can be reached at 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 payslip:

Income and deductions if the employee is paid by direct deposit. Information.

In Arizona, payment is made semi-monthly within 16 days; FLSA-exempt employees may be paid monthly by a foreign employer.

The delay time between the provision of the services and the employee’s obligation to pay is five days after the payment deadline (10 days if the payroll system is non-state); 16 days for exceptional or overtime pay.

Arizona payroll law requires that involuntarily terminated employees be paid their final salary within 3 business days and that voluntarily terminated employees be paid their final salary by the next regular payday or by mail if the employee requests it.

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The deceased employee’s wages, 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.

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

The employer is also required in Arizona to keep records of wages forfeited and remitted to the state for a five-year period.

Arizona law has no provision for crediting tips toward the state minimum wage.

There is no provision in the Arizona payroll law for required rest or meal times.

Arizona law does not contain a requirement for keeping wage and hour records, so it is probably wise to follow FLSA guidelines.

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

Child Support Enforcement Division

3443 N. Central Avenue, 4th floor.

Phoenix, AZ 85012


Arizona has the following provisions for child support deductions:

  • When to start withholding? 14 days after receipt of order.
  • When should the payment be sent? Within 2 days after payday.
  • When to send notice of termination? Within 10 days of termination.
  • Maximum management fee? greater than $4 per month. or $1 per pay period.
  • retention limits? 50% of disposable income

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