How Arkansas State Taxes Work
Arkansas uses a set of graduated brackets, but the story of the last few years is that they keep coming down. The top rate was 4.9 percent not long ago; for 2026 it's 3.7 percent, cut from 3.9 percent and made retroactive to January 1. Income is taxed in steps: nothing on the first $5,299 of taxable income, then 2, 3 and 3.4 percent through the middle brackets, with the 3.7 percent top rate kicking in above about $26,400. One quirk worth knowing is that Arkansas uses the same bracket ranges for single and married filers; what changes for couples is the standard deduction, which doubles from $2,470 to $4,940.
Run a $55,000 single income through it and Arkansas taxable income is about $52,530, the state tax comes to roughly $1,563 after the personal credit, and the effective state rate is just 2.8 percent of gross pay. Arkansas also gives a $29 personal tax credit that comes straight off the tax, one for you, one for a spouse, and one per dependent. Every line, state and federal, is itemized on your pay stub, so it's worth knowing how to read each one.
What Gets Taken Out of Your Arkansas Paycheck
Every Arkansas paycheck carries federal income tax, Social Security at 6.2 percent and Medicare at 1.45 percent, the same FICA math as everywhere else, with Social Security capped at the $184,500 wage base for 2026. Arkansas state tax rides on top at an effective 2.5 to 3.3 percent for most middle incomes, a moderate load that keeps getting lighter as the state cuts rates. If your employer offers health insurance or a 401(k), those pre-tax deductions come out before taxes are figured, which lowers every line that follows. No Arkansas city or county charges an income tax, so there's no local line on your stub anywhere in the state, Little Rock included.
Hourly Pay and the 2026 Minimum Wage
An hourly wage just gets annualized first. Arkansas's minimum wage is $11.00 an hour in 2026 for employers with four or more workers, the level set by a 2018 ballot measure that finished phasing in back in 2021, so it hasn't moved in a few years. It's still comfortably above the federal $7.25 floor. At $20 an hour, 40 hours a week is $800, about $41,600 a year, and a single filer at that rate with biweekly checks nets about $1,328 per check, with an Arkansas state tax of roughly $1,067 for the whole year. Overtime past 40 hours pays time and a half, and every extra dollar runs through the same tax lines.
Overtime in 2026: your overtime is withheld like normal wages all year. The federal deduction of up to $12,500 of overtime premium ($25,000 joint, through 2028) is claimed on your federal return. Arkansas starts its tax from federal income, so watch the current-year Arkansas instructions to see how the deduction flows through. Your W-2 carries the amounts, explained in our guide to
overtime on the W-2 and code TT.
