The Arkansas bonus tax calculator at the top of this page uses the supplemental tax rate so employers can easily figure out the net pay (or take-home pay) your employee should take home for wage payments such as bonus pay.
Behind the numbers
Behind the numbers
Updated: June 27, 2025
Does Arkansas tax bonuses?
Yes. Arkansas uses a 3.9% flat supplemental withholding rate on bonuses, effective July 1, 2024. Previous rates were 4.4% (Jan–June 2024) and 4.7% (2023).
How to calculate bonus tax in Arkansas
If bonuses are paid separately, apply the flat 3.9% Arkansas rate plus 22% federal. (If paid with regular wages, use the aggregate method based on total income.) According to the Arkansas Withholding Tax Employer’s Guide from the Department of Finance and Administration, it may be worth letting employees know that the 3.9% withholding rate could result in over-withholding in some cases. If that happens, they won’t be able to recover the extra amount until they file their Arkansas income tax return.
What is the bonus tax rate in Arkansas?
3.9% (from July 2024), plus 22% federal.
How can employers in Arkansas pay bonuses to employees?
Bonuses in Arkansas can be paid via:
- Check
- Direct deposit
- Pay card
Why are bonuses taxed differently than standard pay?
To simplify withholding and reduce underpayment, Arkansas allows a flat tax rate on supplemental wages.
How do bonuses work in Arkansas?
Employers must calculate and withhold appropriately, especially if the payment is a lump sum or includes vacation/incentive pay. These are treated as supplemental wages.
How much tax is taken out of a bonus in Arkansas?
Using flat rates: 3.9% state + 22% federal = 25.9% total withholding.