Arizona Payroll Taxes: Employer Guide

A summary of what Arizona employers are responsible for beyond federal payroll tax obligations — registration, withholding, unemployment insurance, and reporting. This is general information, not a substitute for guidance from the Arizona Department of Revenue, the Department of Economic Security, or a licensed payroll professional.

1. Register for a Withholding Account

Employers register for an Arizona withholding account using Form JT-1 (the Arizona Joint Tax Application), filed through AZTaxes.gov. Your Arizona Withholding Account Number is the same as your nine-digit federal EIN. Filing Form JT-1 also begins your registration for Arizona unemployment insurance with the Department of Economic Security (DES).

2. Withhold Arizona Income Tax

Each employee elects a flat withholding percentage on Form A-4 (0.0% to 3.5% of gross taxable wages). If an employee doesn't submit an A-4 within five days of hire, withhold at the default 2.0% rate.

3. Pay Arizona SUTA (Unemployment Tax)

Unlike income tax withholding, SUTA is paid entirely by the employer — it is never deducted from employee wages. New employers pay a flat 2.0% rate for a minimum of two calendar years, on the first $8,000 of each employee's wages for the year (the SUTA taxable wage base). After that, DES assigns an experience rate — currently ranging from 0.08%–20.60% — based on your unemployment claims history. Estimate your cost with the Arizona Payroll Calculator.

4. File Quarterly Reports

Employers file Unemployment Tax and Wage Reports (Form UC-018) with DES quarterly, with deadlines on April 30, July 31, October 31, and January 31. Arizona withholding tax returns are filed with the Arizona Department of Revenue on a schedule based on your withholding volume (quarterly for most small employers).

5. Report New Hires

Federal and Arizona law require reporting every newly hired or rehired employee — including part-time and temporary workers — to the Arizona New Hire Reporting Center within 20 days of their hire date. Required information includes your FEIN and the employee's name, Social Security number, hire date, and address. Non-compliance can result in fines of up to $25 per unreported employee.