Navigating Arizona’s payroll landscape requires understanding its specific regulations and procedures. Here’s a breakdown of key aspects, including tax withholding, unemployment insurance, wage and hour laws, and child support withholding.
**Arizona State Income Tax Withholding**
The Arizona Department of Revenue oversees state income tax collection and reporting. Contact them at:
Department of Revenue
1600 W. Monroe St.
P.O. Box 29009
Phoenix, AZ 85038-9009
602-255-2060 or 800-843-7196
[www.revenue.state.az.us](www.revenue.state.az.us)
Arizona mandates the use of Form A-4, “Employee’s Arizona Withholding Percentage Election,” instead of the federal W-4 for state income tax withholding.
Unlike some states, Arizona excludes salary reductions under Section 125 cafeteria plans and 401(k) contributions from income tax and unemployment tax calculations.
Arizona payroll law doesn’t have specific supplemental wage tax rates.
Filing Arizona State W-2s via magnetic media is optional.
**Arizona State Unemployment Insurance**
The Department of Economic Security, Unemployment Tax Division, handles unemployment insurance. Reach them at:
Department of Economic Security
Unemployment Tax Division
P.O. Box 6028
SAT Code 911B
Phoenix, AZ 85005
602-248-9354
[www.de.state.az.us](www.de.state.az.us)
The taxable wage base for unemployment is $7,000.00 per employee annually. Quarterly wage reporting via magnetic media is also optional.
Arizona requires unemployment records to be kept for four years, including employee information, hire/rehire/termination dates, wages, pay periods, and termination circumstances.
**Arizona Wage and Hour Laws**
The Labor Department enforces wage and hour laws. Contact them at:
Labor Department
P.O. Box 19070
Phoenix, AZ 85005-9070
602-542-4515
[www.ica.state.az.us](www.ica.state.az.us)
Arizona doesn’t have a general minimum wage provision.
There’s no state law mandating overtime pay for employers not covered by the FLSA.
Arizona requires employers to report new hires and rehires within 20 days, including employee name, address, Social Security number, employer name, address, and EIN. Reports can be sent via W-4 or equivalent by mail, fax, or electronically. There’s no penalty for late reporting.
The Arizona new hire reporting agency can be reached at 888-282-2064 / 602-340-0555 or online at [www.az-newhire.com](www.az-newhire.com).
Compulsory direct deposit isn’t allowed in Arizona.
Pay stubs must include earnings and deductions if paid by direct deposit. Pay frequency is semi-monthly (within 16 days of each other); FLSA-exempt employees can be paid monthly by out-of-state employers.
The lag time for payments is five days after the pay period (10 days if the payroll system is out-of-state), and 16 days for exception or overtime pay.
Involuntarily terminated employees must receive final pay within 3 working days. Voluntarily terminated employees must be paid by the next regular payday or by mail if requested.
Wages of deceased employees (up to $5000.00) are payable to the surviving spouse after an affidavit is provided.
Unclaimed wages escheat to the state after one year. Employers must keep records of abandoned wages turned over to the state for five years.
Arizona law doesn’t address tip credits, required rest periods, or meal periods.
There are no specific state record retention requirements for wage and hour records; following FLSA guidelines is advisable.
**Arizona Child Support Withholding**
The Division of Child Support Enforcement oversees child support orders and laws. Contact them at:
Division of Child Support Enforcement
3443 N. Central Ave., 4th Fl.
Phoenix, AZ 85012
602-252-4045
[www.de.state.az.us](www.de.state.az.us)
Key provisions for child support deductions:
* Start Withholding: 14 days after receiving the order.
* Send Payment: Within 2 days of payday.
* Send Termination Notice: Within 10 days of termination.
* Max Administrative Fee: Greater of $4 per month or $1 per pay period.
* Withholding Limits: 50% of disposable earnings.
**Disclaimer:** *Payroll laws are subject to change. Consult with legal and payroll professionals for the most up-to-date information.*