Hiring a summer nanny? Payroll and taxes, handled.See how →

Skip to main content
All State Guides
AZ

Arizona Nanny Tax Guide

Arizona exempts wages paid for domestic service in a private home from state income tax withholding. Household employers don't withhold AZ state income tax from their nanny's paycheck, though the nanny remains responsible for any income tax they owe at year-end. Employer-side SUI (state unemployment) is still required.

Arizona household employer quick facts

State Income Tax
State Unemployment
Disability Insurance
Paid Family Leave

Minimum Wage

$14.70/hour

SUTA Rate Range

0.08% - 20.3%

Key things to know
  • No state income tax withholding for domestic workers
  • State minimum wage is $14.70/hour
  • No disability or paid leave requirements
  • Employer SUI still required on the first $8,000 in wages

Arizona Employer Requirements

State Income Tax (Exempt)

Arizona law prohibits household employers from withholding state income tax on wages paid for domestic service in a private home, per ARS § 43-403(A)(2) and AZ DOR ruling WTR 16-3. This applies even if both parties want to withhold voluntarily. Your nanny is responsible for paying any AZ income tax they owe when they file their return (typically via quarterly estimated payments or a refund adjustment).

State Unemployment Insurance

Employers pay SUI tax on the first $8,000 of wages. New employer rate is 2.0%, with rates ranging from 0.08% to 20.3% based on experience.

Workers' Compensation

While not mandatory for household employers with fewer than 3 employees, workers' comp coverage is recommended to protect both you and your employee.

What will it cost?

Wondering what you'll actually owe as a Arizona employer? Adjust the numbers below to get a quick estimate of your annual tax obligations.

This guide is for informational purposes only and should not be considered legal or tax advice. Tax laws change frequently. Always verify current requirements with your state's tax agency or consult with a qualified tax professional.

Verified accurate as of April 2026Sources: Arizona tax agency, IRS Publication 926

Learn More

Calculate Your AZ Nanny Taxes

Free calculator pre-filled for Arizona employer costs.

Run a Arizona household employer audit

See what the IRS would flag about how you've been paying your nanny in Arizona.

Arizona Nanny Contract

Free contract builder with AZ-specific requirements.

2026 Tax Deadline Calendar

All quarterly deadlines for Arizona and federal taxes.

Complete Guide to Nanny Taxes

Everything you need to know about household employment taxes.

Nanny Cost by State

Compare Arizona employer costs to all 50 states.

NannyKeeper handles Arizona taxes automatically

We calculate and track all state-specific requirements so you don't have to.

Get Started Free