Arizona

Employer Costs, Take-Home Pay, and Tax Wedge for an
Average Manufacturing Wage Worker in ARIZONA


	Annual
	Amount	Rank


Total Cost to Employer*	$30,503	36

Take-Home Pay	$22,736	14
Take-Home Pay, % of Employer Costs	74.5%	3

Tax Wedge*	$7,767	42
Tax Wedge, % of Employer Costs	25.5%	42

Gross Earnings	$27,200

Taxes Withheld from Worker's Paycheck
Social Security/Medicare Payroll Tax	$2,081
Federal Income Tax	$2,048
State Income Tax	$336	37
	-----------
Total Taxes Withheld	$4,464

Hidden Taxes Paid by Employer on Worker's Behalf
Social Security/Medicare Payroll Tax	$2,081
Workers' Compensation Contribution	$1,047	33
State Unemployment Insurance Tax	$119	39
Federal Unemployment Insurance Tax	$56
	-----------
Total Employer-Paid Taxes	$3,303

Employer-Paid (hidden) Share of the Tax Wedge	42.5%	27


Source: Dean Stansel, "The Hidden Burden of Taxation: How the Government Reduces
Take-Home Pay," Cato Institute Policy Analysis No. 302, April 15, 1998.
*Total cost to employer does not include the cost of fringe benefits (such as employer contributions to private health insurance plans and pensions) and tax and regulatory compliance. The tax wedge does not include the host of other taxes--property taxes, sales taxes, gas taxes, cigarette taxes, etc.--that workers must pay with their remaining take-home pay.