Arkansas Payroll Compliance
Every rate, wage base, and threshold Arkansas employers need for 2026 — sourced from the Dept. of Finance and Administration — including membership in an exclusive club of just five states running a two-bracket income tax.
Minimum Wage & Hours
Arkansas’s minimum wage is $11.00/hour, above the federal floor but without automatic CPI indexing — increases require a new ballot measure or legislative action.
| Item | 2026 Value | Notes |
|---|---|---|
| State minimum wage | $11.00/hr | Above the federal floor; no automatic indexing |
| Overtime rule | 40 hrs/week | Federal FLSA; no separate state daily overtime rule |
| Local wage ordinances | None | No Arkansas city or county sets its own minimum wage |
State Income Tax Withholding
Arkansas is one of just five states — alongside Kansas, Massachusetts, Montana, and North Dakota — that run a genuine two-bracket income tax system, the result of progressively lowering its rate through recent tax reform legislation.
| Item | 2026 Value | Notes |
|---|---|---|
| Bracket 1 | 2% | Lower bracket |
| Bracket 2 (top) | 3.9% | One of only two brackets total |
| Deposit schedule | Monthly or quarterly | Based on total withholding liability |
| Local income tax | Rare | Some municipalities may impose local taxes — confirm directly with local authorities |
Unemployment Insurance (SUI)
Arkansas’s SUI wage base matches the FUTA floor at $7,000, but the experienced-employer rate range — 0.30% to 14.00% — is among the widest of any state, meaning a poor claims history carries a real financial penalty.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $7,000 | Matches the FUTA floor |
| New employer rate | 3.1% | Standard initial rate |
| Experienced employer range | 0.30% – 14.00% | One of the widest spreads of any state |
| Administering agency | Division of Workforce Services | Quarterly filing, standard schedule |