Key figures
Arkansas payroll
2026, with sources
- Paid leave program
- None
- Local income tax
- None
Withholding
Register for withholding through ATAP, collect a Form AR4EC from each employee, and withhold using DFA’s formula or tables, effective January 1, 2026: a $2,470 standard deduction, then brackets of 2%, 3%, 3.4% and 3.7%. W-2s go to DFA with the ARW-3 by January 31 and the AR3MAR reconciliation by February 28. There are no city or county income taxes in Arkansas.
Unemployment insurance
Register with the Division of Workforce Services through its Tax21 portal. For 2026 DWS publishes a $7,000 taxable wage base and a 2.0% new-employer rate, lists a 0.200% stabilization rate separately, and sets experienced rates from 0.2% to 5.1% (6.1% to 10.1% in its deficit tiers). Confirm the current year on the DWS page before running the first payroll.
At those figures, a new employer pays $140 per employee per year — low for the region, where Oklahoma’s base is $25,000.
Wages, leave and new hires
Arkansas’s minimum wage is $11.00 for employers with four or more employees. There is no state paid sick leave, paid family leave or disability insurance program. Report new hires to the state new-hire registry within 20 days. Workers’ compensation coverage becomes mandatory at three employees for most businesses.
A startup hiring its first support rep in Fayetteville at $40,000 withholds Arkansas tax under the 2026 formula, pays unemployment tax on the first $7,000, and has no city tax or paid leave premium to add.
Deadlines
- Monthly or as assignedWithholding returnsAR941M / AR941A
- Jan 31W-2 transmittalARW-3
- Feb 28Annual withholding reconciliationAR3MAR
- Last day of the month after the quarterQuarterly UI wage report to DWS
The federal baseline
This page covers what Arkansas adds. The federal rules underneath it apply here too.
Common questions
What is Arkansas’s minimum wage?
$11.00 an hour, set by the 2018 ballot initiative, for employers with four or more employees. It is well above the federal $7.25, and Arkansas has no scheduled increases beyond it.
How much Arkansas tax do we withhold?
The 2026 withholding formula, effective January 1, 2026, starts with a $2,470 standard deduction and applies brackets from 0% up to 3.7%. Employees claim exemptions on the 2026 Form AR4EC.
Payroll next door
- MOMissouri payrollMissouri’s 2026 minimum wage is $15.00 with no inflation indexing after HB 567, and the Prop A sick leave mandate is gone. Kansas City and St. Louis add a 1% earnings tax.
- TNTennessee payrollTennessee payroll has no state income tax or local wage tax; it is unemployment premiums on the first $7,000 of wages, new-hire reports in 20 days, and workers’ comp from five employees counting officers.
- MSMississippi payrollMississippi payroll is 4.0% withholding on income over $10,000 for 2026, unemployment insurance through MDES, new-hire reports within 15 business days, and workers’ comp from five employees.
- LALouisiana payrollLouisiana withholds a flat 3% from 2025, has no state minimum wage or paid leave program, and taxes the first $7,000 of wages for unemployment in 2026.
- TXTexas payrollNo wage tax and no paid leave program. A Texas hire means a TWC unemployment account on a $9,000 wage base, new-hire reporting and the Payday Law’s final-pay deadlines.
- OKOklahoma payrollOklahoma withholds at up to 4.5% in 2026 and charges new employers 1.5% on a $25,000 wage base — high for the region. There is no local payroll tax or paid leave program.
How Arkansas compares
- No tax on wagesStates with no state income tax on wagesArkansas: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programArkansas: no state program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesArkansas: state-level only. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the Arkansas guide
- AccountingAccounting and state tax in ArkansasCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in ArkansasSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in ArkansasPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in ArkansasRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in ArkansasCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.