US State Tax Summeries blue-1

Your Ultimate Guide to Oregon Payroll

Managing payroll in Arkansas? Read our state-by-state guide to US payroll taxes to learn what you must withhold and deduct from employee wages.

Shannon Hodgen
Written by Shannon Hodgen
August 4, 2023
Need help onboarding international talent?
Try Deel

Key takeaways

  1. Arkansas employers are responsible for making various payments on behalf of employees, such as unemployment insurance, which provides temporary financial relief for involuntarily unemployed individuals.
  2. Personal income tax is an important payroll tax that is based on the income of Arkansas residents and withheld and paid by the employer.
  3. Workers’ compensation is another essential payment, protecting both employers and employees in the case of injury in the workplace.

Are you an employer in Arkansas confused by the necessary payroll withholding requirements? 

US payroll taxes differ from one state to another, and this guide acts as an introduction to crucial employer responsibilities in Arkansas, such as unemployment insurance, personal income tax, and workers’ compensation.

Paying unemployment insurance 

Withholding federal taxes is usually front of mind for most employers, ensuring that Medicare and Social Security taxes are paid according to federal legislation. However, employers in Arkansas are also responsible for withholding and paying certain state taxes from their employee’s payroll, such as unemployment insurance. 

Also known as UI, unemployment insurance is an employee payroll tax that employers pay. The US Department of Labor administers the national program and provides temporary payments to individuals who voluntarily become employed, helping to tide them over while they look for new employment. 

Employers can manage Arkansas unemployment insurance through an online portal and find more information on unemployment insurance from the Arkansas Department of Commerce

Withholding personal income tax from your Arkansas employee 

Personal income tax is an individual income tax on the earnings of Arkansas residents. Employers deduct the state income tax from employees’ wages, withhold the amount, and make payments to the state. 

The withheld amount can be paid to the state through the Arkansas online portal, and more information can be accessed from the Arkansas Department of Finance and Administration

Paying your Arkansas workers’ compensation 

In addition to payroll taxes, Arkansas employers are responsible for paying workers’ compensation, insurance that provides medical benefits and financial relief to injured employees while performing their jobs. 

Unlike most other states, Arkansas only needs to purchase workers’ compensation coverage when you have three or more employees in the state. Workers’ compensation can be purchased from a qualified commercial carrier. If you need help finding a provider, browse the Arkansas Workers’ Compensation Commission.

Take note that your workers’ compensation insurance must comply with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

While this introductory guide serves as a helpful starting point for payroll taxes in Arkansas, there are other rules and regulations to remain compliant. At Deel, we help companies navigate these requirements with our convenient US payroll solution. 

Request a demo and see how we help Arkansas employers streamline US payroll processes and ensure compliance with state regulations. 

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.

Deel makes growing remote and international teams effortless. Ready to get started?






Legal experts