AZ · Cost to hire 2026
How much does it cost to hire an employee in Arizona?
The real first-year cost of a W-2 hire in Arizona is the ongoing fully-loaded payroll plus the one-time spend to recruit, onboard, and equip the person. A $75,000 hire runs about $109,240 in year one.
The true first-year cost to hire in Arizona is the ongoing fully-loaded payroll cost of the role plus the one-time costs of onboarding a new person. On payroll, a new employer pays unemployment insurance at 2.0% on the first $8,000 of wages, capping SUI at $160 per worker per year, one of the lower exposures in the country. That sits on top of the 7.65% employer FICA share and federal FUTA. Arizona taxes wage income, but employees carry that, so it does not add to your direct cost, and the state runs no separate employer paid-leave program, keeping the ongoing rate stack simple. The one-time layer is what makes year one heavier than the years that follow: recruiting and job advertising, onboarding and training, and equipment and workspace setup, which HiringMath models at roughly $8,500, plus about $1,500 a year in software. Across Phoenix-area semiconductor fabs, the construction sector riding sustained population growth, and Maricopa and Pima county healthcare systems, those per-seat setup costs add up quickly as headcount grows.
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Pre-filled with Arizona's 2% new-employer SUI rate. Adjust salary, benefits, and one-time costs to fit your hire.
First-year cost of a $75,000 hire in Arizona
| Recurring (annual) | |
| Base salary | $75,000 |
| Employer payroll taxes | $5,940 |
| Workers' comp | $750 |
| Benefits | $10,050 |
| Overhead | $7,500 |
| Software & toolsrecurs yearly | $1,500 |
| One-time (year one) | |
| Recruiting | $4,000 |
| Onboarding & training | $2,000 |
| Equipment & setup | $2,500 |
| Ongoing annual cost (year 2+) | $100,740 |
| Total first-year cost | $109,240 |
First-year cost by salary in Arizona
| Base salary | First-year total |
|---|---|
| $50,000 | $78,827 |
| $75,000 | $109,240 |
| $100,000 | $139,652 |
What drives the cost in Arizona
Arizona's new-employer SUI rate is 2% on the first $8,000 of wages, a maximum of $160 per worker per year (below the national average of 2.07%). That sits on top of 7.65% employer FICA and 0.6% FUTA. Arizona taxes wage income, which the employee pays, so it adds administration but not direct employer cost.
Compare and dig deeper
Weighing an employee against a contractor? See the Arizona W-2 vs 1099 comparison for the breakeven contract rate. Compare neighboring markets, including Arkansas, Massachusetts, Connecticut, Louisiana, or read how much it costs to hire an employee nationally.
Cost-to-hire FAQ for Arizona
- How much does it cost to hire an employee in Arizona?
- Expect two layers. Ongoing payroll adds the 7.65% employer FICA share, federal FUTA, and Arizona SUI at 2.0% on the first $8,000 of wages (up to $160 per worker). Year one then adds one-time costs HiringMath models at about $8,500 for recruiting, onboarding, and equipment, plus roughly $1,500 a year in software.
- What one-time costs come with a new hire in Arizona?
- The one-time layer covers recruiting and advertising, onboarding and training time, and equipment and workspace setup, modeled by HiringMath at about $8,500. These costs are unrelated to Arizona's low SUI rate, so even in a low-tax state they are the largest single driver of why year one costs more than each subsequent year.
- What is the ongoing annual cost after year one in Arizona?
- After setup costs drop off, the recurring annual cost is salary plus the 7.65% employer FICA share, federal FUTA, Arizona SUI (2.0% on the first $8,000, up to $160), any benefits, and about $1,500 in software. With no employer paid-leave tax, Arizona's ongoing per-worker tax cost is among the lower in the country.