Arkansas Payroll Tax Requirements

Arkansas tax agencies:

• Arkansas Department of Finance & Administration (DFA) – State income tax withholding.
• Arkansas Division of Workforce Services (DWS) – State unemployment insurance (SUI) tax.

To report and pay state income tax withholding in Arkansas, employers must register with the Arkansas Department of Finance & Administration (DFA), and to pay state unemployment tax, employers must register with the Arkansas Division of Workforce Services (DWS). Follow the steps below to register with the agencies.

Steps to Register with the Arkansas Department of Finance & Administration (DFA)

After successful registration, you will receive an Arkansas DFA Account ID. You can use this number to file state withholding forms, such as Form AR941M and Form AR3MAR.

Steps to Register with the Arkansas Division of Workforce Services (DWS)

1. Register via Online

• Step 1: Visit the Arkansas Division of Workforce Services Employer Registration.

• Step 2: Select “My company has never registered with the AR Division of Workforce Services. I am applying for an employer account number” and press submit.

• Step 3: Check the box in the first section, then enter your FEIN. Then select Submit.

• Step 4: Complete the registration process for a new employer account.

• Step 5: Once registered, you will receive your UI Tax Account Number.

Employers are not required to register with the Arkansas Department of Workforce Services until they have paid $1000 in wages during a calendar quarter.

2. Register via mail

• To register as a new business by mail, you must file Form DWS-ARK-201.

  Mail to DWS:

  

  P.O. Box 2981,
  Little Rock, AR 72203.

After successful registration, you will receive an Arkansas Unemployment Insurance (UI) Tax Account Number. You can use this number to file Form DWS-ARK-20 every quarter.

Who needs to report?

All Arkansas employers (including government agencies, nonprofits, and household employers) must report:

• New hires: Any employee who completes a W-4 and will be paid wages.
• Rehires employees: Former employees returning after a break of 60 consecutive days or more.

What information must be reported?

Employers of Arkansas must report the newly hired and rehired employees. Here is the information required to report newly hired employees to the Arkansas Division of Workforce Services:

How to report new hires in Arkansas?

To report newly hired employees, follow the steps given below.

What are the penalties for not filing a New hire report in Arkansas?

If an employer in Arkansas fails to submit a New Hire report, they may face the following penalties:

• $25 per person for each new hire, rehire, or independent contractor that is not reported, reported late, or reported with incomplete information.
• $500 per person if the failure to report is due to a conspiracy between the employer and the employee or contractor to avoid reporting.

State Income tax

As of 2025, Arkansas employs a state income tax system with rates ranging from 0% to 3.9%, depending on an individual's taxable income

State Unemployment Tax

State unemployment taxes are state-level payroll taxes that employers pay to fund unemployment benefits for eligible workers who lose their jobs through no fault of their own.

Arkansas State Unemployment Tax Rate

Employers of Arkansas are required to pay state unemployment taxes to provide benefits for the employees. Here are the SUI tax rates offered by the Department of Employment Services (DES):

Arkansas Minimum Wage Requirements

Arkansas sets its own minimum wage, which is higher than the federal rate and adjusts annually based on inflation. Employers must ensure they meet the current state minimum wage for all employees, including a separate, reduced rate for tipped workers—as long as tips make up the difference.

Overtime Regulations

Arkansas follows the federal Fair Labor Standards Act (FLSA) for overtime rules, as the state has no separate overtime law. Non-exempt employees (such as Retail or Restaurant Workers) must be paid 1.5 times their regular rate of pay for any hours worked over 40 in a workweek.

To qualify for exemption, these employees must earn at least $684 per week on a salaried basis and perform the specific job functions defined by the FLSA.

Arkansas State Withholding Payments

Arkansas employers are required to withhold state income tax from employees' wages and remit these withholdings to the Arkansas Department of Finance & Administration (DFA).

Quarterly filers – Payments are due by the last day of the month following the end of each calendar quarter:

Methods to deposit Arkansas State income tax withholding taxes

To deposit your state withholding taxes, you can use various payment methods, which include:

1. Online(Recommended):

• Sign in to Arkansas Taxpayer Access Point(ATAP).
• Go to Customers → My Accounts and open the appropriate account.
• Select ‘Make a Payment’

2. Mail:

To mail your Arkansas income tax payments, complete the payment voucher Form AR1000V (INDIVIDUAL INCOME TAX RETURN PAYMENT VOUCHER)

Mail to:

Arkansas State Income Tax
P.O. Box 2144
Little Rock, AR 72203-2144

3. Fax

You can also fax the completed new hire report to (907) 787-3197.

Arkansas State Unemployment Tax Payments

Arkansas employers must file Unemployment Tax and Wage Reports Form DWS-ARK-209B and make corresponding tax payments to the Arkansas Division of Workforce Services Employer Registration on a quarterly basis. The due dates are
as follows:

Methods to deposit Arkansas State unemployment tax withholding taxes

To deposit your state Unemployment taxes, you can use various payment methods, which include:

• Online (recommended): To pay your unemployment tax payment, Sign in to the Arkansas Tax21 Website and complete the steps to make UI tax payments online.

Quarterly State Income Tax Filings

Form AR941M/AR941Q (Withholding Report): Form AR941M/AR941Q is used to report the monthly and quarterly withholding details, depending on their deposit schedule.

Deadline:

Quarterly withholding tax returns are due by the last day of the month following the end of the calendar quarter. If any of the due dates fall on a weekend or holiday, the following business day will be considered as the due date.

Form AR-3MAR, Employer’s Annual Reconciliation of Income Tax Withheld: Form AR-3MAR is used by Arkansas employers to reconcile the total amount of state income tax withheld from employee wages throughout the year with the payments already made to the Department of Finance and Administration (DFA).

Deadline: Annual reconciliation tax returns are due by February 28 for the preceding calendar year.

Form W-2, Wage and Tax Statement: Arkansas employers are required to file W-2 forms each year to report wages paid and state income tax withheld.

Deadline: Form W-2 is due by January 31 of the preceding calendar year

Quarterly State Unemployment Tax Filings

Form DWS-ARK-209B (Quarterly Contribution and Wage Report): Form DWS-ARK-209B is used to report the unemployment tax reports and payments to the Arkansas DWS.

Deadline: Unemployment taxes are due by the last day of the month following the end of the calendar quarter.