Withholding Calculator
How Do I Determine Which Percentage to Elect?
Every employee must consider the facts of their own situation and adjust their election accordingly.
If you want to keep your withholding approximately the same as last year, use last year's federal Form W-2, or your last pay stub, to calculate which withholding percentage to elect. For example, if box 1 of federal Form W-2 shows $40,000 in wages and box 17 shows $1,000 in state income tax withheld, divide box 17 by box 1 to determine your percentage (1,000 / 40,000 = .025 or 2.5%). To keep your withholding the same as last year, choose a withholding percentage of 1.8% (40,000 x .018 = 720) and withhold an additional $10.77 per biweekly pay period (1,000 - 720 = 280 / 26 = 10.77). Be sure to take into account any amount already withheld for this year.
If you want to withhold more, choose one of the higher percentages or choose to have an additional amount withheld.
If you would rather more closely approximate your tax liability from last year, use the tax liability from your Arizona income tax return. Divide that number by the number of paydays in the current tax year. This will be the amount of income tax you will have withheld from each paycheck. For example, if your tax liability last year was $1,500 and you are paid every two weeks (26 paydays a year) divide $1,500 by 26 (1,500 / 26 = 57.69). This is your withholding goal per paycheck. Next, divide your withholding goal by your biweekly gross taxable wages, $2,000 in this example, to determine the percentage of withholding to gross taxable wages (57.69 / 2,000 = .028845 or 2.88%). An election of 2.7% would result in $54.00 (2,000 x 2.7% = 54) withheld for Arizona from each paycheck ($1,404 annually), while electing 3.6% would result in $72.00 (2,000 x 3.6% = 72) withheld for Arizona from each paycheck ($1,872 annually). Be sure to take into account any amount already withheld for this year.
Note: Underwithholding can result in you owing tax and/or underpayment penalties when you file your Arizona return at the end of the year.
Withholding Calculator
The Withholding Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck.
The Withholding Calculator helps you determine whether you need to give your employer a new Form A-4, Arizona Withholding Percentage Election. You can use your results from the calculator to help you complete the form and adjust your income tax withholding.
Keep in mind that the calculator’s results will only be as accurate as the information you provide. If your circumstances change during the year, recalculate with the new information to make sure that your withholding is still correct.
Use the worksheet below to determine how to keep your Arizona withholding the same. Enter your annual gross taxable wages, the number of paychecks you receive each year, your annual withholding goal, the amount already withheld for this year, the number of paychecks remaining in this year, and select the largest percentage on line 10 that is less than line 9.
| Your Calculation | Example | |||
|---|---|---|---|---|
| 1 | Annual gross taxable wages | $52,000 | ||
| 2 | Number of paychecks per year | 26 | ||
| 3 | Divide line 1 by line 2. This is wages per paycheck. | 52,000/26 = $2,000 | ||
| 4 | Annual withholding goal | $1,800 | ||
| 5 | Amount already withheld | $900 | ||
| 6 | Balance of withholding for the calendar year. Subtract line 5 from line 4. | 1,800 - 900 = $900 | ||
| 7 | Number of paychecks remaining in the calendar year | 13 | ||
| 8 | Divide line 6 by line 7. This is your Arizona withholding goal per paycheck | $900 / 13 = $69.23 | ||
| 9 | Percentage: Divide line 8 by line 3 | 69.23 / 2,000 = 3.4615% | ||
| 10 | Withholding percentage that is less than line 9. Check this box on line 1 of Form A-4 |
2.7% | ||
| 11 | Multiply line 10 by line 3 | 2.7% x $2,000 = $54.00 | ||
| 12 | Subtract line 11 from line 8. Enter this amount in the additional amount space on line 1 of Form A-4. |
69.23 - 54.00 = $15.23 |
Select a higher percentage for line 10 than line 9 if you want an overpayment (refund) and a lower percentage if you want an underpayment (owe).
Withholding percentage options.
Rates are a percentage of gross taxable wages
|
Percentage rate |
|---|
| 0.8% |
| 1.3% |
| 1.8% |
| 2.7% |
| 3.6% |
| 4.2% |
| 5.1% |