Phoenix Paycheck Calculator

Taxes are a big part of the resources that help the economies of both the state and federal governments. When you get employed, your employer will have to withhold money for taxes to send to the Internal Revenue Service (IRS).

There are two primary forms that the IRS uses to gather revenue from businesses, and they’re the W-2 and W-4. Your employer has to fill out the W-2 and submit it to the IRS at the end of each year.

As an employee, you must fill out the W-4 form when joining the company or before your first payday. However, you must update it when your financial and personal information changes.

All businesses in Phoenix are required to have the necessary registration for tax purposes. If you don’t have a pay stub, you can get help from a tax professional or use a paycheck calculator.

Registering a Business in Phoenix

If you want your business to run smoothly, you need to abide by all the regulations set by the IRS. Registering your business ensures you and your employees conduct your taxable activities peacefully.

In Phoenix, you must register your business with the Arizona Department of Revenue (ADOR). This department helps ensure you keep up with your license fees and taxes. The same will apply if you wish to register a business in Tucson, Scottsdale, or Flagstaff.

Next, you must look into your business's necessary licenses and permits. Not all businesses have licenses. However, some require more than one to run smoothly. Some necessary ones include the transaction privilege tax license, regulatory licenses, withholding tax registration, and local business license.

For example, you’ll need to collect 

Arizona Tax Overview

Like the rest of the state, Phoenix has no local income tax. However, state income tax rates range between 2.55% - 2.98%. We will look at some of the taxes that employers and employees contribute to in Phoenix.

SUTA Rates

The State Unemployment Tax Act (SUTA) tax is important as it helps ensure that employees aren’t desolate when they lose their jobs. It’s also referred to as the State Unemployment Insurance (SUI) or Reemployment Tax, and employers should contribute towards it every quarter.  

FUTA Rates

The FUTA  rate in Phoenix is at 6%. This rate is for the first $7,000 an employee makes, which is taxable annually. Therefore, the FUTA tax rate for each employee is $420 per year. 

FICA  Rates

By 2022, the Social Security tax in Arizona required employees and employers to pay 6.2% of wages. This rate is up to $147,000. In addition, for Medicare tax, each employee and employer contribute 1.45% of all their wages. 

Corporate/Personal Income Tax

This tax is levied on salaries, interest wages, dividends, overtime pay, and other income generated annually.

Use Tax

This tax is a type of sales tax that covers any goods purchased outside of your taxation jurisdiction. This is for when you travel to another state and purchase gifts for the people back home.

Transaction Privilege Tax

This tax is similar to sales tax and is not available in all states across the US. Any activities that incur the TPT tax must have a license.

Property Tax

This is paid for property ownership by a corporation or individual. It’s a real estate ad-valorem tax, and the local government calculates the property’s location.

Other Paystub Deductions

Phoenix Payroll Taxes Withholding

Other pay stub deductions include withholding tax. In Phoenix,  income tax withholding is a percentage of the employee’s gross taxable wages. The current withholding tax rate in Phoenix is 2%.

Phoenix Paycheck Calculator

Phoenix paycheck calculators are essential as they help you know your employee's pay after all the deductions. There are many paycheck calculators online that you can use to calculate your take-home salary. Furthermore, you may find these in any city, for example, Tucson, Scottsdale, and Flagstaff paycheck calculators.

You just need to take your gross pay and deduct federal, state, and local income taxes, state insurance and FICA taxes, and any other necessary deductions. The number you end up with is your monthly take-home salary.

Phoenix Child Support Calculator

Child support is the mandatory payment a parent who is not in custody of a child makes to assist with financial support. States handle child support differently. In Phoenix, the income share method determines child support. This way, custodial and non-custodial parents contribute to the child’s upkeep.

In the income share method, the non-custodial parent pays a percentage of the calculated costs. These costs are a proportional share of both parents’ income. 

Labor Laws in Phoenix

Phoenix follows Arizona's state labor laws. Arizona is an employment-at-will state. Therefore, without an employee contract, you could be terminated at any time and for any reason. 

In Phoenix, the current minimum wage is $13.85. Phoenix does not have any specifications regarding overtime pay. However, per the Fair Labor Standards Act, non-exempt employees are entitled to 1.5 times their regular workweek rates. 

In Phoenix, no individual under the age of 16 should work over three hours on a school day when school is in session. Furthermore, they shouldn’t work more than eight hours a day when school isn’t in session or on a non-school day. Additionally, under-16 individuals should not work after 9:30 pm or before 6:00 am on school days.

Phoenix Paystub Generator

A paystub is a paper you save after cashing your paychecks. It helps you monitor your income information, such as overtime pay and taxes, among others. They differ from state to state, and the Phoenix paystub generator works seamlessly for Arizona employers and employees.

Most paystub generators are easy to use and take about 2 minutes to finish. Since all you require is the salary information and the company name, you don’t need a calculator.

Phoenix Tax Resources

There are many Phoenix tax resources available that can help you prepare for your take-home income. The Arizona Department of Revenue offers a wide range of these resources, which include; TPT Forms, Publication 010 Summary of Arizona Taxes, Model City Tax Code, Property Tax, Tax Factoring, and Facebook among many others.

FAQs

1. How does one calculate withholding tax?

To figure out the exact amount to withhold for income tax from your employees, you should use the information provided in Form A-4. To ensure things run smoothly, all your employees should fill out this form within five days of employment.

Groups, such as native Americans, military spouses, and non-residents, are exempt from withholding tax. Employees with no tax liability for the year can file for an exemption; they must indicate this on form A-4.

2. How do I calculate the FICA tax?

The Federal Insurance Contributions Act (FICA) tax combines the Social Security and Medicare taxes. As of 2022, your contribution and those of your employees for the Medicare tax are 1.45% each. On the other hand, the Social Security tax contribution is 6.2% each for wages up to $147,000.

For maximum thresholds and more information on FICA tax rates, visit the IRS official website.

3. Do employers have to pay both federal and state unemployment taxes?

Yes. When paying the state unemployment tax (SUTA), you also need to remember the federal unemployment tax (FUTA). The employer alone pays FUTA tax. Moreover, it only covers the first $7,000 of the employee’s wages.

FUTA rates vary from year to year, and it's currently at 6%; however, you’ll get a credit of 5.4% thanks to paying SUTA taxes. This way, you’ll only end up paying a FUTA tax of 0.6%.

Conclusion

Though there are free online paycheck calculators that you can use to get a rough estimate of your take-home salary, it's always wise to consult a tax professional.