Paycheck Calculator Arkansas - AR

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Federal Withholding

State Withholding


Additional Information


Arkansas-AR Paycheck Calculator: Hourly and Salary

From the rivers to the mountain ranges, Arkansas State is a natural state full of diverse landscapes. This state offers plenty of floating, fishing, and other recreational fun.

This mid-America's most beautiful travel destination even has a much lower cost of living compared to the rest of the country. According to the report published by C2ER’s Cost of Living index, the residents of Arkansas have approximately 15% lower cost of living than the rest of the nation. This report was presented, with respect to the cost of housing, grocery, transportation, utilities, healthcare, etc.

To provide the best living standard to Arkansas's residents and to help them overcome their living expenses, the Arkansas State has increased the minimum wage to $9.25 that is $2.00 higher than the federal minimum wage rate of $7.25. This minimum wage is expected to increase to $11 in 2021.

So if you are nature lover, planning to settle and work in this beautiful natural state, and trying to deduce what you are going to earn working here, then you are suggested to use of Arkansas-AR Paycheck Calculator, to get accurate and instant results. Moreover, you must continue reading this guide to know how to calculate the take-home pay for working in Arkansas State.


Arkansas Tax Facts:

  • Arkansas’s Residents are assessed by the State using 6 state income tax brackets ranging from just under 1% up to 7%.
  • Arkansas State uses a Progressive tax rate system. However, unlike other states, where tax rates are defined according to filing status, allowances, and income, the Arkansas state considers only the income of the individual.
  • The Median household income for Arkansas, according to the United States Census Bureau, is $43,813.
  • The minimum wage for Arkansas employees is $9.25. Whereas, the minimum wage for tipped employees is $2.63 per hour, where the combined pay, including minimum wage plus tips, must be equal to the state minimum wage.
  • Full-time students, who work part-time for up to 20 hours in a week, are eligible to be paid 85% of the state minimum wage.
  • Some employers who are exempted according to the Fair Labor Standards Act (FLSA) are also exempted from State Minimum wage law. Those employees include the domestic workers (i.e., caregivers and babysitters), some agricultural workers, and federal government employees.
  • All residents of Texarkana, Arkansas, are eligible to claim the border city exemption, where no Arkansas income tax would be charged to them while working in Texarkana.
  • No city in Arkansas charges any local income tax for its individuals.

How to calculate Paycheck in Arkansas

The following are the steps that every employee and employee needs to consider to calculate paycheck for Hourly or fixed salary while working in Arkansas.

Step 1: Determine the Pay Type

The first and foremost thing to calculate the paycheck is to determine the Pay Type. It is whether the employee is paid on:

  • Hourly basis: Employee is paid at an agreed hourly rate for the number of hours worked in a day or a week. Here the employee is paid overtime for every extra hour he/she works over regular hours. According to the Fair Labor Standard Act, regular hours are 8 hours a day or 40 hours a week, and for every extra hour, an employee must be paid at time and half of the regular hourly rate as overtime.
  • Salary basis: Employee is paid a fixed amount for a set number of days regardless of how many hours he/she works. Unfortunately, there is no law for paying overtime to a salaried employee.

Arkansas State and Federal Laws on Pay Type:

  • Arkansas allows any Pay types, including fixed (salary), hourly, job, piecework, or commission.
  • Minors (14 and 15 of age) are not allowed to work more than eight hours a day, 48 hours in one week or six days a week. For minors of age 16, have an exception, as they are allowed to work a maximum of 10 hours in a day, 54 hours a week or 6 days a week.
  • There are no such state laws by Arkansas to that regulates the Hour Worked, Regular Hours for adults. Therefore, the adult employers and employees must follow the guideline provided by U.S Wage and Hours Division and FLSA (Fair Labor Standard Act). However, Arkansas State Law does have laws to regulate overtime, which you will read in Step 3 ahead.

Step 2: Determine the Pay Frequency

The second step is to determine the Pay Frequency of your Paycheck; it is how often the employees are paid. All States have their law for pay frequencies. Therefore, you must study the State Payroll law (discussed below in this step) before calculating the paycheck.

Some of the standard Pay Frequencies are:

Pay Frequency Details
Weekly The employees are paid once a week.
Bi-Weekly The employees are paid once every two weeks.
Semi-Monthly The employees are paid twice a month. Usually on the 15th and 30th day of the month.
Monthly (Discouraged by Arizona State Law) The employees are paid once every month. Mostly at the start or end of the month.
Quarterly (Discouraged by Arizona State Law) The employees are paid after every three months.
Annually (Discouraged by Arizona State Law) The employees are paid once a year.

Arkansas State Laws for Pay Frequencies:

  • Arkansas Law requires employers to pay their employees on at-least semi-monthly or bi-weekly frequency. However, Employers are allowed to pay with higher frequency, only if a regular payment schedule is determined for all employees.
  • State Law of Arkansas, also require Nonexempt salaried employees to receive salary on regular frequencies.

Step 3: Determine the Gross Pay

The third step is to determine the Gross Pay of the employee. Gross Pay is the amount of money an employee has earned in the last pay period. It consists of several components that are essential to consider to calculate Income Taxes, Deductions, and contributions. Below are the essential components to deduce gross pay:

Hourly Employee:

  1. Basic Salary is calculated by multiplying Number of Hours worked in a pay frequency by Regular Hourly Rate.
  2. Overtime pay is calculated according to FLSA law, where every extra hour worked after 8 hours workday or 40-hours in a week, would be counted as Overtime hour that must be paid in time and half of regular hourly rate.
  3. Double Time Pay is a time that an employee is paid in double the regular hourly rate by the employee. It is paid if the employee works on federal holidays. However, their employers are not bound to pay it according to FLSA or Arkansas State law.
  4. Now, to deduce the Gross Pay, we need to add Overtime Pay, Double Time Pay, Bonuses, Commissions, fringe benefits, Vacations Pay, Sick Pay, and Holiday Pay (If Any) into Basic Salary.

Note: We provide multiple calculators to calculate Total Hours Worked and Overtime that you can use to calculate your Paycheck. They are as follow:


Salaried Employee:

  1. To determine the gross salary for the employee, start with the annual salary and divide it by the number of pay periods to get a basic salary. For example, if the employee’s annual salary is $27400, and is paid once a semi-month, then you must divide 27400/24. Therefore, the employee's basic salary is $1142.
  2. Now, add (if any) reimbursements, commissions, bonuses, *fringe benefits, or tips to the basic salary of the employee.
  3. Next, you need to add overtime pay into basic salary, only if the salaried employee has a salary equal to or below $455 a week or $23,660 annually. The FLSA regulates this, and the employee must be paid overtime at the rate of time and half of the hourly rate.
  4. Last, subtract any unpaid time off(s) from the basic salary to get Gross Pay.

*Fringe Benefits:

Fringe benefits are the benefits offered by employers to employees who meet specific criteria set by the company. These benefits are often taxable and can affect the employee's paycheck.

The Fringe benefits are often deducted from employee’s Paycheck by Specific Dollar Amount or Percentage of the Gross Pay.

Some of the common Fringe Benefits are:

  • Health Insurances, including Medical, Dental, and Vision.
  • Individual HSA or Family HSA.
  • Housing, Company Car, and Cell Phone.
  • Gym and Fitness.
  • Student Loan Repayment.

Arkansas State and Federal Laws on Gross Pay:

  • If the employer pays regular wages and supplemental wages separately, then they must charge the federal income tax rate of 22% (As in 2019) on the Supplemental income to their employees.
  • Arkansas Law requires the employers to pay their non-exempted employees, the overtime at the rate of one and half times of regular hourly rate for every excess hour after the regular 40-hour workweek. However, this law doesn't apply to employers having four or more employees or employers covered by the federal Fair Labor Standards Act (FLSA).
  • The minimum wage for Arkansas hourly employees is $9.25. Therefore, the earned income of salary based employees must be equal to or higher than the minimum wage according to the number of hours worked.
  • Employees that are exempted from the minimum wage are also required to receive a minimum wage of $455 a week, according to the Fair Labor and Standards Act.
  • Arkansas State law or Federal Law doesn’t bound the employers to pay for lunch breaks or meals to their employees, only with the exception of under 16 employees who work in the entertainment industry. Therefore, the decision of paid lunch breaks depends on the employer and employee mutual agreement.
  • If the employer chooses to offer lunch breaks for 20 minutes or less than it must be paid, moreover, If the employer provides lunch break for more than 30 minutes, than it can be unpaid.
  • Employers are not bound to pay for severance pay to their employees, according to Arkansas labor laws. However, if the Employers is willing to pay, then it must comply with the terms of its established policy or employment contract.
  • Arkansas State law requires employers to provide adequate unpaid breaks to mothers for breastfeeding or pumping breast milk.
  • Employers are free to decide whether they want to pay their employees, the Sick Leaves, or Paid Time-Offs.

Step 4: Determine the Filing Status:

Here starts the complicated part. After the Gross Pay for the employee is deduced, the next thing an employer should do is refer to the W-4 tax form of an employee. This form is filled by the employee while joining the job.

Note:

  • The employee has to update his Form W4 if any significant changes come to his/her life. Such considerable changes include marriage, divorce, or child-baby.
  • The employee also has the authority to make a change in his/her form W4, an unlimited number of times, but only once per paycheck.

The form W4 contains all the essential details, including income tax details, marital status, and the number of allowances to be claimed. These details are required to calculate the Taxable Income, Federal Taxes, Allowances, State Taxes, and Local Taxes, that the employer has to withhold from the employee's salary.

Note: As IRS has made changes in the Tax Form W4, which would be effective from January 2020. Therefore, all the following steps are according to the new form.

There is a total of four filing statuses, from which the employee has to choose one. These are the following:

  • Single
  • Married filing separately
  • Married filing jointly
  • Head of Household

Note: You can select "Single" as Marital Status on the Arkansas Paycheck Calculator if the employee is "Single" or "Married filing separately." Else Choose "Married" if the employee is "Married Filing Jointly" or "Head of Household."


Step 5: Calculating the Taxable Income:

Taxable income is the income, which is used to determine the amount of taxes that should be withheld from the employee’s paycheck by the employer. It is different from Gross Pay.

There is the portion of income that is exempted from the taxes, such as cash gifts, inheritances, rebates, Welfare income, child support, State and local tax refunds, Life insurance, etc. This portion can be determined and claimed by the taxpayer (employee) by using "itemized deductions."

As the "itemized deductions" process is too long, the Taxpayer can also go for “standard deductions (a specific amount defined by the government to be deducted from Gross Pay according to taxpayer’s filing status” instead, for calculating the Taxable Income.

Standard Deduction amount for 2018 to 2025 is as follow:


To determine the Taxable income, the taxpayer (employee) has to:

Filing Status Standard Deduction Amount
Single $12,000
Married Filing Separately $12,000
Married Filing Jointly $18,000
Head of Household $24,000
Qualifying Widow(er)s $24,000
  • Subtract any “Standard deductions” or “Itemized deductions” deductions from the Gross Pay.
  • Subtract any “tax exemptions” such as “dependent exemption”

Note: This is just a general overview of Taxable Income. Many other factors need to be considered for Taxable income determination. Moreover, the criteria can be different from person to person. You must refer to your Lawyer, or study Taxable income in detail for calculating the accurate Taxable Income.


Step 6: Subtracting the Pre-Tax Contributions from Taxable Income:

As of now, the taxable income of an employee is deduced. The next step is to subtract any pre-tax contributions that were chosen by the employee. These contributions are designed to encourage employees to save for their retirement. Additionally, it further reduces the amount of taxable income, hence, increasing the take-home amount of an employee.

However, not all contributions are exempted from all taxes, but only from federal income tax. Therefore, some employees may have to pay FICA, state, or other taxes on such contributions.

Following are some of the common contributions that an employee can choose:


  1. Traditional 401(k) or 403(b) or other qualified retirement plans
  2. traditional IRA - Individual Retirement Accounts
  3. Solo 401(k), SEP-IRA or SIMPLE IRA
  4. healthcare savings account (HSA)
  5. Dental Insurance
  6. Vision Insurance
  7. Commuter Benefits including commuter parking, commuter transit, and commuter benefits
  8. Health Insurance
  9. Dependent care FSA contributions

Step 7: Deducing the Number of Federal Allowances:

Before jumping on to Federal Taxes, it is essential to conclude the number of Allowances that an employee needs to claim.

Allowances are exemptions from paying a certain amount of income tax. Therefore, the amount of withholding tax that an employer withholds from the employee’s paycheck is inversely proportional to the number of allowances claimed.

General Number of Allowances a Taxpayer (Employee) must Claim
Situation Number of Allowances to claim
The taxpayer depends on someone 0 to 1 Allowance
Single – One Job – Taxpayer doesn't depend on anyone 1 to 2 Allowances
Married Couple with no dependents 2
Head of Household with one dependent 3
A married couple with one dependent 3
A married couple with two dependent 4

Effects of Allowances on Federal Taxes

The employee in form W4 already fills details of claimed allowances. The employee must do a complete working before filling out the details for the number of allowances he/she needs to claim as claiming extra Allowances may cause underpayment of taxes that results in a penalty by the IRS. On the other hand, claiming fewer Allowances is like lending money to IRS without any benefit.

Effects of Allowances on Federal Taxes
Situation Effects on Federal Withholding Taxes Consequences
To many Allowances claimed ·Withholding Federal Tax decreases
·Take-Home Pay Increases
·The taxpayer may owe money to IRS
·Tax Payer has to pay the pending tax amount along with penalties
Too few Allowances claimed ·Withholding Tax Federal increases
·Take-Home Pay decreases
·IRS may owe money to the taxpayer, for which
·Tax Payer is likely to receive a refund
·Tax Payer may have less money to spend the whole year until the refund is received

Details on how many allowances an employee must claim are provided here.


Step 8:  Subtracting the Federal Taxes

Once the final taxable income is calculated after subtracting all deductions (standard or itemized) and contributions, a certain amount is withheld by the employer from an employee's paycheck as federal income tax along with the two federal (FICA) programs: Social Security and Medicare.

Federal Income Taxes

This Federal Income Tax rate is applied at a gradual level, ranging from 0% to 37% of taxable earnings. The Tax rate depends on the filing status, number of Allowances claimed, and taxable income.

Therefore higher the income, the higher the federal tax rate, and the higher the number of Allowances claimed, the higher the Net Pay (Take-home Pay).

These rates are as follow:

Single Filers
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,050 10.0%
$19,050 - $77,400 12.0%
$77,400 - $165,000 22.0%
$165,000 - $315,000 24.0%
$315,000 - $400,000 32.0%
$400,000 - $600,000 35.0%
$600,000+ 37.0%

Married, Filing Separately
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Head of Household
Taxable Income Rate
$0 - $13,600 10.0%
$13,600 - $51,800 12.0%
$51,800 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%


FICA Taxes (Social Security and Medicare):

In addition to the Federal Income Tax, Employers are also abided to withhold an amount from the employee’s paycheck for FICA Tax (Federal Insurance Contributions Act). These taxes are used to help American citizens with retirement, disability, survivorship, and medical treatment.

FICA Tax comprises of:

  1. Social Security Tax

A total of 12.4% of FICA tax is paid for Social Security, by both employee and employer. Here 6.2% is paid by the employee and remain 6.2% is funded by the employer. However, the Social Security tax is only applicable to the first $132,900 (in 2019) earned. No amount is charged above this earning,

  1. Medicare Tax

1.45 percent each is paid to Medicare by both employee and employer. Moreover, if the taxpayer (employee or employer) earns more than $200,000 as a single filer or $250,000 as a married couple than additional Medicare taxes of 0.9% are to be paid.


Note: If you are calculating your federal taxes as an employer, you have to add FUTA unemployment taxes in addition to FICA taxes, which is 6% of the first $7,000 of each employee’s taxable income. Moreover, you can also claim a tax credit of up to 5.4% for state unemployment tax you pay, only if you pay on time and in full.


Some points related to Federal Withholdings Taxes for Arkansas State:

  • The employee is exempted from paying federal tax if, in the previous tax year, he/she has received a refund of all federal income tax withheld from his/her paycheck because he/she had zero tax liability.
  • The employee is exempted from paying federal tax if, in the current year, he/she is expecting to receive a refund of all federal income tax withheld because he/she expects to have zero tax liability again. If the employee thinks that he/she qualifies for this exemption (for example, because his/her income is quite low), he/she can indicate this on his/her W-4 Form.
  • The employee is exempted from paying social security tax who are nonpermanent, temporary, or substitutes.

Step 9: Subtracting State Taxes:

Now, as you are done with Federal Payroll Taxes, the next thing that you need to calculate is Arkansas State Taxes. This State charges the progressive Income tax to its residents in seven tax brackets, each depending on the gross income. The tax range for 2019 is 0.9% - 6.9%, where the tax rate increases with higher pay.

The employers need to calculate the employee’s Arkansas state tax withholdings based on information provided in Form AR4EC. This form is filled and submitted by the employee at the time of joining the job. However, it should be updated when any significant changes occur in life on an employee, such as marriage, childbirth, or divorce.

What is the state withholding tax rate for Arkansas?

In Arkansas, the State Income Tax rates are as below:

All Filers
Arkansas Taxable Income Rate
$0 - $4,399 0.9%
$4,400 - $8,699 2.4%
$8,700 - $13,099 3.4%
$13,100 - $21,699 4.4%
$21,700 - $36,299 5.0%
$36,300 - $77,400 6.0%
$77,401+ 6.9%

Arkansas State Tax Allowances (Standard and Itemized Deductions):

Like, Federal Tax allowances, the Arkansas employee can also claim Arkansas State Allowances, according to the filing status. A taxpayer can avail deductions from any one of the two methods; Standard or Itemized Deductions, depending on which way would give them maximum relief from the state income tax. However, if a married couple is filing separately, and one is using itemized deductions, then the state requires the other to do the same.

Standard Deductions from Arkansas State Tax
Filing Status Exemption Amount
Single $2200
Married Filing Separately (Same Return) $2200
Married Filing Separately (Different Return) $2200
Married Filing Jointly $4400
Head of Family $2200
Qualifying Widow(er) $2200


Note:
Itemized deduction is a detailed topic, for which you can refer to the Arkansas State Tax official website for further Assistance. 

Arkansas State tax credits and deductions

Arkansas State also offers special discounts / Tax credits/deductions to the eligible individuals. The eligibility criteria depend on the filing status and other conditions.

Make sure to refer to the official site of Arkansas State, to read the eligibility criteria. Maybe you are lucky enough to reduce your State payroll taxes further.

Arkansas Laws on State Income Tax:

  • If the employer pays regular wages and supplemental wages separately, then they must charge the Arkansas State income tax rate of 6.9% (As in 2019) on the Supplemental income to their employees.
  • Arkansas State does not have any reciprocal agreements with other states. However, there are special border exemptions from Arkansas State income tax and withholding for residents of Texarkana, Arkansas. However, the residents of Texarkana must provide their employers with Form AR4EC(TX) and file an income tax return to confirm their residency and exemption from tax withholding.

Step 10: Subtracting the Post-Tax Deductions and Contributions

Although employees are not charged any post-tax deductions. However, they can choose some post-tax contributions and benefits. If an employee has opted some, then its employer's duty to account them into the employee's paycheck.

Some of the common Post-Tax Contributions are:

  • Retirement funds like Roth 401(k).
  • A certain amount may also be withheld by the employer from the employee's paycheck as Wage Garnishments if the employee is subjected to any court-ordered garnishments.
  • Contributions to 529 college savings plans, Union dues or charitable donations. 

Step 11: Calculating Paycheck

Once you have calculated all the details, as discussed above, then it's time to enter all your details into our Arkansas Paycheck Calculator and deduce the paycheck “Net Pay” amount instantly.

Frequently Asked Questions:

Answer: Arkansas Payroll income tax rates range from 0.9% - 6.9%, which is divided into seven tax brackets, which are totally dependent on the income. Therefore, the higher the income, the higher the payroll tax rate you will be charged, regardless of your filing status.

Answer: Arkansas (AR) withholding is an amount withheld for the Arkansas State, from the income of Arkansas Residents. This amount is determined through the seven tax brackets that range from 0.9% - 6.9%, provided by the Department of Finance and Administration of Arkansas. However, there is no local income tax charged by any city in Arkansas.

Answer: Yes, Arkansas has a state income tax, but no local income tax.

Answer: Following are the filing status, along with the gross income, on which Arkansas Residents are eligible to file taxes:

  1. Single, and gross income was at least $12,260.
  2. OR Head of household with one or no dependent, and having a gross income of at least $17,431
  3. OR Head of a family with two or more dependents, and having a gross income of at least $20,778
  4. OR Married filing a joint return with one or no dependent, and having a gross income of at least $20,675
  5. OR Married filing a joint return with two or more dependents, and having a gross income of at least $24,883
  6. OR Married filing separately, different or same returns, and having a gross income of at least $5,099.
  7. OR Qualifying widow or widower (widowed in 2016 or 2017, and not remarried in 2018) with one or no dependent, and having a gross income of at least $17,431.
  8. OR Qualifying widow or widower (widowed in 2016 or 2017, and not remarried in 2018) with two or more dependents, and having a gross income of at least $20,778
  9. OR All Nonresidents or part-year residents, earning a gross income from Arkansas, have to file taxes. (Regardless of what income amount they have received). 

Answer: The average or median household annual income of Arkansas Residents is $43,813, according to the U.S. Census Bureau, which is less than the median household yearly income of $60,336 across the entire United States.

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