Average Salary in Arizona (AZ)

Arizona has one of the most aggressive income-tax reform stories of the past decade. The state converted from a four-bracket graduated tax to a flat 2.5% rate in 2023, ahead of the original phase-in schedule — making Arizona's income tax one of the lowest flat rates among states that tax income at all. The $72,581 median household income sits close to the national average, and the cost-of-living index of 102 is only marginally above it. The economy has pivoted sharply toward technology: TSMC's massive semiconductor fab complex in north Phoenix is expected to reach 6,000 employees at full build-out, Intel has expanded its Chandler campus repeatedly, and the entire Phoenix metro has become one of the fastest-growing tech-employment markets in the US. Banner Health is the state's largest private employer with over 50,000 staff, reflecting the outsized role healthcare plays driven in part by retiree in-migration. The $14.35/hour minimum wage is adjusted annually for inflation under Prop 206. Property taxes are below the national median. Water policy is the structural risk for the state's growth trajectory — Colorado River allocations and Central Arizona Project constraints are reshaping development timelines in the West Valley. Detailed breakdown follows.