Payroll Arizona Unique Aspects of Arizona Payroll Law and Practice
Below is a MRR and PLR article in category Business -> subcategory Other.
Unique Aspects of Arizona Payroll Law and Practice
Arizona payroll has distinct features that employers need to be aware of. This article outlines key elements, including tax withholding, unemployment insurance, wage and hour laws, and child support obligations.
Arizona Tax Withholding and Reporting
The Arizona Department of Revenue manages state income tax collection and reporting. Instead of using the Federal W-4 form, Arizona requires the A-4 form for state tax withholding.
Cafeteria plans and 401(k)s in Arizona are not taxable for income or unemployment taxes. Unlike other states, Arizona does not have a supplemental wage tax rate provision. Employers can choose to file State W-2s using magnetic media.
Unemployment Insurance in Arizona
The Department of Economic Security oversees unemployment insurance. Arizona's taxable wage base is $7,000, meaning taxes are only applicable to the first $7,000 of an employee’s wages annually. Reporting via magnetic media is optional, and unemployment records must be kept for at least four years, including details such as social security numbers and wage periods.
Wage and Hour Laws
Managed by the Arizona Labor Department, there is no statewide minimum wage or overtime pay provision for non-FLSA covered employers. Employers must report every new hire, providing details like the employee’s name, address, and social security number within 20 days. Arizona does not penalize late reporting.
Pay frequency is typically semimonthly, with specific timing requirements for payment after services and termination. Final pay must be provided within three days for involuntarily terminated employees and by the next payday for voluntary departures.
Additional Payroll Details
- Direct Deposit: Not compulsory.
- Pay Stubs: Must include earnings and deductions.
- Deceased Employees: Wages up to $5,000 can be paid to the surviving spouse upon affidavit.
- Escheat Laws: Unclaimed wages must be surrendered to the state after one year, with records kept for five years.
- Tip Credits and Meal Periods: Arizona law does not cover these areas.
Child Support Withholding
The Division of Child Support Enforcement handles child support orders. Employers must begin withholding within 14 days of receiving an order and send payments within two days post-payday. Termination notices are required within 10 days, and the withholding limit is 50% of disposable earnings.
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This guide is intended for informational purposes and may not reflect recent legal changes. Always consult current laws or a legal professional for up-to-date information.
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