For more detail on how deductions change taxable wages and take-home
pay, see our
pre-tax vs. post-tax deductions guide.
Arkansas Paycheck Tax Calculator: How Arkansas Withholding Works
An Arkansas paycheck calculator has to follow the
state's own formula, not just apply a flat percentage. Arkansas
annualizes your wages, subtracts a $2,470 standard deduction, uses
graduated rates from 0% to 3.7% with bracket adjustments, rounds the
annual tax to the dollar and then credits $29 for each exemption on
Form AR4EC. That's why your Arkansas withholding is usually 2% to
3.5% of gross pay, even though the top rate is 3.7%. Use this section as an Arkansas withholding calculator and Arkansas income tax calculator when reviewing the 2026 DFA formula and AR4EC exemptions. On your pay
stub, it usually shows up as
SIT or SWT (state withholding tax).
The 2026 Arkansas Tax Cut
In a special session that ended May 6, 2026, lawmakers cut the top
individual income tax rate from 3.9% to 3.7%, effective January 1,
2026. It follows earlier cuts that brought the top rate down from
4.4% for 2023 to 3.9% for 2024. The Department of Finance and
Administration's 2026 withholding formula already uses 3.7%, so
current paychecks reflect the cut. If a calculator or pay stub still
shows 3.9%, it's using last year's rates.
Form AR4EC: Arkansas Exemptions
New employees give their employer Form AR4EC, the Employee's
Withholding Exemption Certificate. You claim one exemption for
yourself, two if you're married and claiming your spouse or filing
as head of household, and one more for each dependent. Each
exemption lowers annual withholding by $29. There's also a line for
an extra dollar amount per paycheck. If you don't file an AR4EC, your
employer must withhold with no exemptions. Lower-income workers who
expect to owe no Arkansas tax may qualify to claim exemption from
withholding on Form AR4ECSP.
Federal Withholding for Arkansas Paychecks
Federal income tax withholding is based on your wages, pay frequency
and Form W-4. The calculator supports filing status, Step 2(c), Step
3 credits and Step 4(a), 4(b) and 4(c). If you claim the new overtime
or tips deductions, our
W-4 Step 4(b) deductions worksheet guide
shows how to enter them. For more detail, see our
2026 federal tax withholding guide.
Social Security is 6.2% up to $184,500 in 2026, and Medicare is
1.45% of all wages, plus 0.9% above $200,000. For the federal side of
overtime, see why overtime is still taxed on your 2026 paycheck.
Texarkana Border City Exemption
Texarkana straddles the Arkansas and Texas line, and Arkansas gives
its residents a special break. People who live in Texarkana,
Arkansas are exempt from Arkansas income tax on income received
while they live there. People who live in Texarkana, Texas are
exempt only on income they earn in Texarkana, Arkansas, and Texas
has no income tax of its own (see our
Texas paycheck calculator). You have to
prove residency to the state, and you should tell your employer so
it stops withholding Arkansas tax. In the calculator, a Texarkana,
Arkansas resident's Arkansas line would be $0.
Working Across State Lines
Apart from Texarkana, Arkansas has no reciprocal agreements with
other states. Nonresidents generally owe Arkansas tax on wages for
work done in Arkansas. Arkansas residents who work in another state
usually claim a credit on their Arkansas return for tax paid to that
state. Texas and
Tennessee
don't tax wages, so Arkansas residents working there still owe
Arkansas tax and may want extra withholding on Form AR4EC. If you
commute to Missouri,
Oklahoma,
Louisiana or
Mississippi,
that state withholds its own tax and you claim the credit at home.
No Local Income Tax
No Arkansas city or county taxes wages, so Little Rock, Fayetteville,
Fort Smith, Bentonville and every other city add nothing to your
paycheck deductions. Local sales taxes affect prices, not take-home
pay.
Employer Payroll Costs in Arkansas
Some Arkansas payroll costs never show up on a pay stub. Employers
pay state unemployment insurance (SUI) on the first $7,000 of each
employee's wages, plus the employer share of Social Security and
Medicare and federal unemployment tax. Employees don't contribute to
Arkansas unemployment insurance. When year-end comes, our
W-2 form generator
can use the same wage and withholding totals.
Why Your Actual Arkansas Paycheck May Differ
This calculator is a close estimate, not your employer's payroll
run. Your exemptions on file, year-to-date wages, benefit elections,
rounding by pay period and a 27th biweekly payday in some years can
all move the result a little. Bonuses are withheld differently from
regular pay (see why bonuses are taxed so high),
and three-paycheck months
change your monthly cash flow but not the tax on each check. For a
full checklist, see why your paycheck is lower than expected. If your Arkansas withholding looks too
high, check whether your employer has a current AR4EC for you; with
none on file, it withholds with zero exemptions.
Official 2026 Arkansas Payroll Sources
Payroll facts on this page are checked against the
Arkansas DFA 2026 withholding tax formula,
Form AR4EC,
the Arkansas Division of Labor,
IRS Publication 15-T for 2026
and the Social Security Administration taxable maximum.
Reviewed September 23, 2026.
