Does Arkansas have payroll tax?

How are payroll taxes calculated in Arkansas?

Multiply the Period Gross Pay by the number of pay periods per year to arrive at the annual gross pay.

  1. Monthly Gross Pay.
  2. X 12 = Annual Gross Pay.
  3. Semi-Monthly Gross Pay X 24 = Annual Gross Pay.
  4. Bi-Weekly Gross Pay X 26 = Annual Gross Pay.
  5. Weekly Gross Pay.
  6. X 52 = Annual Gross Pay.
  7. Daily Gross Pay.
  8. X 260 = Annual Gross Pay.

What is the tax rate on paychecks in Arkansas?

Overview of Arkansas Taxes

Gross Paycheck $3,146
Federal Income 15.32% $482
State Income 5.07% $159
Local Income 3.50% $110
FICA and State Insurance Taxes 7.80% $246

Does Arkansas have a State withholding tax?

Here are the basic rules on Arkansas state income tax withholding for employees. If your small business has employees working in Arkansas, you’ll need to withhold and pay Arkansas income tax on their salaries. This is in addition to having to withhold federal income tax for those same employees.

What kind of taxes does Arkansas have?

The low income tax table is set up for 2021 so those Arkansans pay no income tax on the first $4,699 earned, 2% on income between $4,700 and $9,199, 3% on income between $9,200 and $13,899 and 3.4% on income between $13,900 and $22,899. The middle income tax table is set up for 2021 so those Arkansans pay .

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What payroll taxes do employers pay in Arkansas?

Called FICA taxes, Social Security and Medicare are withheld from each employee’s paycheck at 6.2% and 1.45% respectively. You, as the employer, are also required to pay a matching amount out of your bank account. The FUTA rate is 6.0% on the first $7,000 that is paid to each employee in that year.

Does Arkansas tax retirement income?

For instance, Arkansas exempts Social Security benefits and up to $6,000 of retirement income from its state income tax. And, as a plus for veterans, all military pension income is tax-exempt. Beginning in 2021, the top rate for taxpayers with net income over $79,300 also went from 6.6% to 5.9%.

How much will my sales tax be in Arkansas?

Sales Tax Calculator of Arkansas for 2021

The state general sales tax rate of Arkansas is 6.5%. Cities and/or municipalities of Arkansas are allowed to collect their own rate that can get up to 3.5% in city sales tax.

How much is a bonus taxed in Arkansas?

The supplemental withholding rate is reduced to 6.6%, down from the previous 6.9%. Supplemental wages are defined as bonuses, commissions and overtime wages paid at the same time as wages. Employers should withhold 6.6% of the payment for state income tax.

What is Arkansas withholding?

Employers should withhold 6.6% of the payment for state income tax. Employees should be advised that the amount withheld may result in overwithholding, but the employee cannot recover the overpayment until the state income tax return is filed. (Withholding tax employer instructions, effective March 1, 2020.)

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How do I pay withholding tax in Arkansas?


Payments are due on the 15th of the following month. Payments can be made by mail using the 941M form. Payment also can be made by phone and on the internet at The Federal Employer Identification Number (EIN) is used to report and remit withholding taxes.

Is Arkansas a high tax state?

According to a midyear report from the Tax Foundation, a Washington tax-policy group, Arkansas’ average combined state and local sales-tax rate is 9.48%, making it the third-highest statewide average in the country, behind Louisiana at 9.55% and Tennessee at 9.547%.

Is Arkansas a mandatory withholding state?

If you are domiciled in Arkansas, state tax withholding is required when federal taxes are withheld.

Is Arkansas a good state to retire in?

Arkansas is a relatively tax-friendly state for retirees. Social Security is totally exempt from the state’s income tax. Arkansas also offers seniors a deduction of $6,000 for other types of retirement income like from pensions or an IRA.

Is Arkansas a good place to live?

Arkansas is a good place to live especially if you prefer to live close to the vast American wilderness. Given the natural beauty of the state and that the cost of living is low across most of the state; there are scores of great areas to live in Arkansas.