Complete Guide to Arkansas Paycheck Calculations
Understanding your Arkansas paycheck is crucial for effective financial planning. Whether you're aLittle Rock professional, a Fayetteville small business owner, or aTexarkana resident navigating the unique border city exemption, knowing exactly how much you'll take home helps you budget with confidence. Our Arkansas paycheck calculator provides precise calculations for federal withholding, FICA taxes, and Arkansas state income tax to give you an accurate picture of your net pay.
Key Arkansas Paycheck Facts for 2025
- State Income Tax Rate: 0% - 3.9% (progressive brackets)
- Standard Deduction: $2,410 (single), $4,820 (married filing jointly)
- Social Security Tax: 6.2% on wages up to $176,100
- Medicare Tax: 1.45% on all wages (plus 0.9% additional over $200,000)
- Texarkana Exemption: Residents exempt from Arkansas income tax on wages earned in Texarkana
Understanding Arkansas State Income Tax Withholding
Arkansas uses a progressive income tax system with rates ranging from 0% to 3.9%. Unlike many states, Arkansas applies the same tax brackets regardless of your filing status—whether you're single, married, or head of household, you'll use the same income thresholds. This simplifies calculations but means high earners face the same top rate regardless of family situation.
2025 Arkansas Income Tax Brackets
| Taxable Income Range | Tax Rate | Tax Calculation |
|---|---|---|
| $0 - $5,500 | 0% | No tax owed |
| $5,500 - $10,900 | 2.0% | 2% of amount over $5,500 minus $109.98 |
| $10,900 - $15,600 | 3.0% | 3% of amount over $10,900 minus $218.97 |
| $15,600 - $25,700 | 3.4% | 3.4% of amount over $15,600 minus $281.37 |
| Over $25,700 | 3.9% | 3.9% of amount over $25,700 minus $409.86 |
Texarkana Border City Exemption
If you live in Texarkana, Arkansas and work in Texarkana, you're exempt from Arkansas state income tax on those wages. You must file Form AR-TX with your employer to claim this exemption. However, wages earned outside the Texarkana area remain subject to Arkansas income tax.
How Federal Taxes Impact Your Arkansas Paycheck
Federal withholding is typically the largest deduction from your Arkansas paycheck. The amount depends on yourfiling status, income level, and the information you provided on yourForm W-4. The 2025 federal standard deductions are $14,600 for single filers, $29,200 for married couples filing jointly, and $21,900 for heads of household.
Federal Tax Brackets for 2025 (Single Filer)
- 10% on income up to $11,000
- 12% on income from $11,001 to $44,725
- 22% on income from $44,726 to $95,375
- 24% on income from $95,376 to $182,050
- 32% on income from $182,051 to $231,250
- 35% on income from $231,251 to $578,125
- 37% on income over $578,125
FICA Taxes: Social Security and Medicare
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare programs. These taxes are split between you and your employer:
Social Security Tax
- • Rate: 6.2% (employee portion)
- • Wage Base: $176,100 (2025)
- • Maximum Tax: $10,918.20 per year
- • Employer Match: 6.2%
Medicare Tax
- • Rate: 1.45% (employee portion)
- • No Wage Limit: Applies to all earnings
- • Additional Medicare: 0.9% over $200,000
- • Employer Match: 1.45%
Real-World Arkansas Paycheck Examples
Example 1: Entry-Level Professional in Little Rock
Sarah earns $36,000 annually ($3,000 monthly) as a marketing coordinator in Little Rock. She's single, claims 0 allowances, and has $200/month in pre-tax health insurance premiums.
Total Tax Rate: 22.4% | Annual Take-Home: $27,943
Example 2: Married Couple in Fayetteville
Mike and Jennifer have a combined income of $85,000 annually($7,083 monthly). They file jointly, claim 2 allowances, and contribute $500/month to their 401(k).
Total Tax Rate: 21.5% | Annual Take-Home: $66,755
Example 3: Texarkana Resident (Tax-Exempt)
David lives in Texarkana, AR and works in Texarkana, TX. He earns$45,000 annually ($3,750 monthly) and qualifies for the border city exemption.
Savings from Exemption: $89/month ($1,068/year) | Total Tax Rate: 16.9%
How to Optimize Your Arkansas Paycheck
1. Adjust Your W-4 Withholding
If you consistently receive large tax refunds, you're over-withholding. Submit a new Form W-4 to your employer to reduce federal withholding and increase your monthly take-home pay. Use the IRS Tax Withholding Estimator for guidance.
2. Maximize Pre-Tax Deductions
Contributions to 401(k), HSA, and FSA accounts reduce your taxable income for both federal and Arkansas state taxes. This lowers your tax bill and increases your net pay while saving for retirement or healthcare expenses.
3. Claim the Texarkana Exemption
If you qualify for the Texarkana border city exemption, file Form AR-TX with your employer immediately. This can save you up to 3.9% in state income tax, which is significant over a full year.
4. Review Pay Frequency Impact
If your employer offers different pay frequencies, understand how this affects your paycheck size. More frequent paychecks mean smaller individual amounts but better cash flow management.
Common Arkansas Paycheck Mistakes to Avoid
❌ Not Updating W-4 After Life Changes
Getting married, having children, or taking a second job significantly impacts your tax situation. Failing to update your W-4 can result in under-withholding and a surprise tax bill in April.
❌ Ignoring the Social Security Wage Base
Once you earn $176,100 in 2025, Social Security withholding stops. If you have multiple jobs, you may overpay. Track your YTD earnings and claim the excess on your tax return.
❌ Missing Out on Pre-Tax Benefits
Many Arkansas employers offer pre-tax benefits like health insurance, dental, vision, and retirement plans. Not enrolling means paying taxes on money you could have excluded from taxable income.
❌ Forgetting About Arkansas' Low Income Tax Credit
If your income falls below certain thresholds, you may qualify for Arkansas' low income tax credit, which can significantly reduce or eliminate your state tax liability. Check if you qualify when filing.
Arkansas Payroll Laws and Requirements
Minimum Wage & Overtime
- • Minimum Wage: $11.00 per hour (as of 2025)
- • Overtime Rate: 1.5x regular rate for hours over 40/week
- • Pay Frequency: At least semi-monthly required
- • Final Paycheck: Due within 7 days of termination
State Unemployment Insurance (SUI)
- • Taxable Wage Base: $7,000 per employee
- • New Employer Rate: 2.0% (includes surcharges)
- • Employee Portion: None (employer-paid only)
- • FUTA Credit: Up to 5.4% credit for timely payment
Arkansas vs. Neighboring States: Paycheck Comparison
How does Arkansas stack up against neighboring states for take-home pay? Let's compare a$50,000 annual salary (single filer, no pre-tax deductions):
| State | State Tax Rate | Annual State Tax | Monthly Net Pay | Difference from AR |
|---|---|---|---|---|
| Arkansas | 0% - 3.9% | $1,425 | $3,612 | — |
| Texas | 0% (no income tax) | $0 | $3,731 | +$119/month |
| Oklahoma | 0.25% - 4.75% | $1,850 | $3,577 | -$35/month |
| Missouri | 1.5% - 4.95% | $2,100 | $3,556 | -$56/month |
| Tennessee | 0% (no income tax) | $0 | $3,731 | +$119/month |
Key Insight
Arkansas' state income tax is competitive with neighboring states. While Texas and Tennessee have no income tax, they typically have higher property and sales taxes. Arkansas' overall tax burden is moderate, making it an attractive state for both workers and retirees.
Arkansas Paycheck Documentation and Record Keeping
Arkansas employers must provide employees with detailed pay stubs each pay period. Your pay stub should include:
- Gross wages (regular, overtime, bonuses)
- All tax withholdings (federal, state, FICA)
- Pre-tax and post-tax deductions
- Net pay (take-home amount)
- Year-to-date totals for all categories
- Pay period dates and hours worked
Important
Keep all pay stubs for at least three years. They're essential for verifying tax withholdings, proving income for loans or rentals, and resolving any discrepancies with your employer or the IRS.
Future Changes to Arkansas Paycheck Calculations
Arkansas has been actively reducing income tax rates. The top rate decreased from 4.7% in 2023 to 3.9% in 2024, with further reductions possible. Stay informed about:
- Annual adjustments to tax brackets for inflation
- Changes to the standard deduction amounts
- New tax credits or modifications to existing credits
- Federal tax law changes affecting withholding calculations
- Adjustments to Social Security wage base limits
Author: Jurica Šinko | Last Updated: September 11, 2025 | Sources: Arkansas Department of Finance and Administration, IRS.gov, Social Security Administration
Disclaimer: This calculator provides estimates for educational purposes only. Consult a tax professional for personalized advice. Tax laws change frequently—verify current rates with official sources before making financial decisions.