What is the average income in Arizona?

The median household income in Arizona is approximately $72,581 (2024), ranking 28th among US states. Phoenix metro has a median of $78,200, Tucson $56,600, and Scottsdale $108,600. Arizona's income has been growing faster than the national average due to tech and remote worker migration.

Is Arizona affordable to live in?

Arizona is close to the national average in cost of living (index ~100-105). Phoenix is slightly above average, while Tucson is below average at ~93. Housing has risen significantly — the Phoenix median home price has roughly doubled since 2019. Still, Arizona is much more affordable than California, making it popular with relocating Californians.

What is Arizona's income tax rate?

Arizona has a flat income tax rate of 2.5% — one of the lowest state income tax rates in the country. This took effect in 2023, down from a graduated system with rates up to 4.5%. Combined with no tax on Social Security and reasonable property taxes, Arizona has a relatively low overall tax burden.

Living in Arizona: Income, Housing, Taxes & Cost of Living (2026)

Arizona at a Glance

Metric	Value	National Rank
Population (2024)	7.5 million	14th
Median household income	$72,581	28th
Median home price	$410,000	Above average
Cost of living index	102	Average
State income tax	2.5% flat	6th lowest (among states with income tax)
Sales tax (state + local avg)	8.37%	Above average
Property tax (effective rate)	0.62%	12th lowest
Unemployment rate	3.8%	Slightly above average

Income in Arizona

Median Household Income by City

City/Metro Area	Median Household Income	Cost of Living Index	Affordability Rating
Scottsdale	$108,600	120	Good
Chandler	$95,200	108	Good
Gilbert	$100,400	112	Good
Phoenix	$68,200	102	Fair
Mesa	$64,800	98	Good
Tempe	$62,400	105	Fair
Tucson	$56,600	93	Good
Flagstaff	$62,200	118	Fair
Prescott	$58,400	108	Fair
Sierra Vista	$55,200	86	Excellent
Yuma	$48,800	88	Good
Lake Havasu City	$52,600	92	Good

Top Industries and Salaries

Industry	Average Salary	Growth Rate
Semiconductor manufacturing	$95,000-$140,000	Strong (TSMC, Intel)
Healthcare	$65,000-$110,000	Strong
Aerospace/Defense	$80,000-$130,000	Strong
Technology	$85,000-$150,000	Very strong
Financial services	$60,000-$100,000	Moderate
Tourism/Hospitality	$32,000-$55,000	Moderate
Construction	$45,000-$75,000	Strong

Housing in Arizona

Home Prices by City

City/Area	Median Home Price	Price per Sq Ft	Median Rent (2BR)	Price-to-Income
Scottsdale	$725,000	$380	$2,200	6.7
Gilbert	$520,000	$260	$1,850	5.2
Chandler	$485,000	$265	$1,800	5.1
Phoenix	$415,000	$255	$1,500	6.1
Tempe	$440,000	$295	$1,650	7.1
Mesa	$400,000	$240	$1,450	6.2
Tucson	$310,000	$195	$1,200	5.5
Flagstaff	$525,000	$310	$1,700	8.4
Prescott	$500,000	$280	$1,600	8.6
Sierra Vista	$240,000	$150	$950	4.3
Yuma	$260,000	$165	$1,050	5.3
State Average	$410,000	$245	$1,400	5.6

Housing Market Trends

Metric	2020	2022 (Peak)	2024	2026 (Est.)
Phoenix median home price	$280,000	$450,000	$425,000	$415,000
Tucson median home price	$225,000	$330,000	$315,000	$310,000
Year-over-year change	+15%	+25%	-2%	+1%
Inventory (months of supply)	1.2	1.5	3.8	4.2

Taxes in Arizona

Arizona’s Flat Tax

Tax	Rate	Notes
State income tax	2.5% flat	All income levels (as of 2023)
Standard deduction (single)	$14,600	Same as federal
Standard deduction (married)	$29,200	Same as federal

Total Tax Burden Comparison

Gross Income	Federal Tax	AZ Income Tax (2.5%)	FICA	Property Tax ($410K home)	Effective Total Rate
$50,000	$3,962	$885	$3,825	$2,542	22.4%
$75,000	$8,115	$1,510	$5,738	$2,542	23.9%
$100,000	$13,615	$2,135	$7,650	$2,542	25.9%
$150,000	$25,915	$3,385	$10,878	$2,542	28.5%

Arizona Tax Advantages

Advantage	Details
Low flat income tax (2.5%)	Among the lowest in the country
No tax on Social Security	Full exemption
Low property taxes (0.62%)	12th lowest effective rate
No estate or inheritance tax	Only federal rules apply
Military retirement income	Fully exempt from state tax (as of 2023)

Cost of Living Breakdown

Category	Arizona Index	National Average	Annual Cost (Single)	National Annual
Housing	108	100	$18,144	$16,800
Groceries	98	100	$4,900	$5,000
Transportation	100	100	$10,000	$10,000
Healthcare	98	100	$4,900	$5,000
Utilities	102	100	$4,080	$4,000
Miscellaneous	98	100	$3,920	$4,000
Total	102	100	$45,944	$44,800

Affordability Analysis

Income Needed to Live Comfortably

Household Type	Phoenix	Tucson	Scottsdale
Single person	$55,000	$45,000	$70,000
Couple, no children	$82,000	$68,000	$105,000
Family of 4	$105,000	$85,000	$135,000

California-to-Arizona Migration Math

Category	Los Angeles	Phoenix	Annual Savings
Housing (mortgage + tax + insurance)	$4,200/mo	$2,300/mo	$22,800
State income tax ($100K income)	$5,570	$2,135	$3,435
Groceries	$5,300/year	$4,900/year	$400
Gas and transportation	$12,000/year	$10,000/year	$2,000
Total annual savings			$28,635

Best Cities by Financial Profile

If You Want…	Best City	Why
Best job market	Phoenix metro	Largest economy, tech + healthcare growth
Most affordable	Sierra Vista or Yuma	Lowest costs, military communities
Highest incomes	Scottsdale/Gilbert/Chandler	Affluent suburbs, tech corridor
College town	Tucson or Tempe	University of Arizona, ASU
Retirement destination	Prescott, Green Valley, Sun City	Lower pace, senior amenities
Outdoor lifestyle	Flagstaff	Mountain town, 4 seasons at elevation

Arizona Pros and Cons

Financial Pros	Financial Cons
Low 2.5% flat income tax	Housing prices doubled since 2019
No Social Security tax	High sales tax (8.37% avg)
Low property taxes (0.62%)	Water scarcity concerns (long-term risk)
Strong job growth (tech, semi, healthcare)	Summer AC costs ($200-$400/mo)
No estate/inheritance tax	Below-average wages in many sectors
Rapidly growing economy	Traffic congestion worsening in Phoenix
300+ days of sunshine	Extreme heat limits outdoor activities 3-4 months