Arkansas Wage and Payroll Tax Facts
February 01, 2024
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Arkansas.
Select a state or federal tax guide
The state of Arkansas requires a higher minimum wage rate than the rate required by the federal government in the Fair Labor Standards Act (FLSA). The state's Tipped Minimum Wage rate and Actual Tip Credit rate are similarly higher than their federal counterparts.
When it comes to processing payroll, Arkansas-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
The below information was last updated January 30, 2024. It is not intended as legal or tax advice.
Arkansas Minimum Wage Rates
|
Wage Type |
Arkansas Rates |
Federal Rates |
|
Minimum Wage |
$11.00 |
$7.25 |
|
Tipped Minimum Wage |
$2.63 |
$2.13 |
|
Actual Tip Credit |
$8.37 |
$5.12 |
Arkansas State Income Tax (SIT) Rates
Arkansas' SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax.
| Income Tax Bracket [Over X] - [But not over Y] |
2024 Income Tax Rate |
| $0 - $5,299 | 0.00% |
| $5,300 - $10,599 | 2.00% of excess over $5,300 minus $105.98 |
| $10,600 - $15,099 | 3.00% of excess over $10,600 minus $211.97 |
| $15,100 - $24,999 | 3.40% of excess over $15,100 minus $272.37 |
| $25,000 - $89,600 | 4.40% of excess over $25,000 minus $522.36 |
| $89,061 or greater | 4.40% of excess over $89,601 minus corresponding adjustment amount |
|
Additional Arkansas SIT Details |
|
|
Supplemental Withholding Computation |
4.70% |
|
Valid Filing Statuses |
|
|
Exemptions (rate) |
Number of dependents |
| Exemption (individuals) |
|
|
Form W-4 |
Form AR4EC |
|
Reconciliation Frequency |
Annual |
Arkansas State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
Arkansas SUI Tax Details |
|
|
Taxable Wage Base |
$7,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.0225% – 10.125% |
|
Rates for New Employers |
2.025%* |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; through March 31 |
*This includes the 1.90% base rate and the required 0.125% Administrative Assessment tax.
Arkansas State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Arkansas, however, doesn't require employers to collect an SDI tax.
Miscellaneous Arkansas Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Arkansas currently has a unique reciprocal agreement with Texas that only applies to the towns of Texarkana, Arkansas, and Texarkana, Texas.
- Texarkana, Arkansas residents are exempt from Arkansas' SIT, but they must file an income tax return and provide their employer with Form AR-TX to certify residency and exemption.
- Texarkana, Texas residents are exempt from Arkansas' SIT, but only on wages earned in Texarkana, Arkansas. These residents must pay Arkansas' SIT on wages earned anywhere else in Arkansas.
Paid Sick Leave (PSL) Taxes
The state of Arkansas doesn’t require employers to collect PSL taxes, nor does the state have a program providing such leave to employees.
Paid Family and Medical Leave (PFML) Taxes
The state of Arkansas doesn’t require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.
Arkansas Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Division of Finance & Administration for withholding tax topics and the Division of Workforce Services for unemployment tax topics.
|
Registration Details |
Department of Finance & Administration |
Division of Workforce Services |
|
Phone |
(501) 682-1895 | (501) 682-3798 |
|
Online Registration |
Arkansas Taxpayer Access Point Homepage | Tax 21 Employer Registration Page |
|
Registration Form |
Form AR-1R | |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued in 5-7 days via either the online process or mail. | Online and paper registration options are available. Account numbers will be issued during the online process or in 3-4 weeks via mail. |
|
Employer Self-Service Login |
Arkansas Taxpayer Access Point Homepage | Tax 21 Login Page |
Additional Arkansas Payroll Tax Resources
- Department of Finance & Administration Online Tax Services
- Division of Workforce Services UI Employer Handbook
- Division of Workforce Services UI Employer Forms Library
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.
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