What is the average income in Arkansas?

The median household income in Arkansas is approximately $56,335 (2024), ranking 48th among US states. Northwest Arkansas (Fayetteville-Bentonville) is the exception, with a median of $72,500 driven by Walmart, Tyson, and J.B. Hunt headquarters.

Is Arkansas cheap to live in?

Yes. Arkansas has the lowest cost of living in the US in BEA's 2024 regional price parities (86.9, with Mississippi next at 87.0). Housing is extremely affordable — the median home price is around $205,000, about half the national average. The Northwest Arkansas corridor is more expensive but still well below national average.

What are taxes like in Arkansas?

Arkansas has income tax rates from 2.0-3.9% (reduced in recent years), a state+local average sales tax of 9.45% (4th highest in the US), and low property taxes (average effective rate 0.62%). No tax on Social Security benefits. The state has been progressively cutting income tax rates.

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

Arkansas is one of the five cheapest states to live in, with a cost of living roughly 15% below the national average and median home prices under $200,000 in most cities. The state’s economy punches above its weight: Walmart (Bentonville), Tyson Foods (Springdale), J.B. Hunt (Lowell), and Dillard’s (Little Rock) are all headquartered here, and Northwest Arkansas has become a genuine boomtown with tech jobs, startup culture, and corporate relocations. The income tax is progressive (up to 3.9% after recent reform), and property taxes are among the lowest in the country. Little Rock and Fayetteville offer the strongest income-to-cost ratios, while Hot Springs and Jonesboro provide deep affordability for retirees and remote workers.

Arkansas at a Glance

Metric	Value	National Rank
Population (2024)	3.07 million	34th
Median household income	$56,335	48th
Median home price	$205,000	4th lowest
Cost of living index	87	5th lowest
State income tax	2.0-3.9%	Below average
Sales tax (state + local avg)	9.45%	4th highest
Property tax (effective rate)	0.62%	12th lowest

Income in Arkansas

Median Household Income by City

City/Metro Area	Median Household Income	Cost of Living Index	Affordability Rating
Bentonville	$82,400	94	Excellent
Fayetteville	$58,200	92	Good
Rogers	$72,500	93	Excellent
Little Rock	$55,800	88	Good
Fort Smith	$48,200	80	Good
Jonesboro	$49,400	82	Good
Conway	$52,600	84	Good
Hot Springs	$42,800	82	Fair
Pine Bluff	$33,600	76	Fair
Springdale	$56,400	90	Good

Housing in Arkansas

Home Prices by City

City/Area	Median Home Price	Price per Sq Ft	Median Rent (2BR)	Price-to-Income
Bentonville	$365,000	$180	$1,400	4.4
Rogers	$310,000	$165	$1,300	4.3
Fayetteville	$320,000	$170	$1,200	5.5
Little Rock	$215,000	$115	$1,000	3.9
Conway	$225,000	$120	$950	4.3
Fort Smith	$165,000	$90	$800	3.4
Jonesboro	$185,000	$100	$850	3.7
Hot Springs	$210,000	$120	$900	4.9
Pine Bluff	$105,000	$55	$650	3.1
State Average	$205,000	$110	$950	3.6

Taxes in Arkansas

Income Tax Brackets (2025)

Taxable Income	Tax Rate
$0 – $5,099	2.0%
$5,100 – $10,299	3.0%
$10,300 – $24,299	3.4%
Over $24,300	3.9%

Arkansas has been cutting its top rate progressively — from 6.9% in 2020 to 3.9% in 2025, with a target of 3.5% by 2027.

Total Tax Burden

Gross Income	Federal Tax	AR Income Tax	FICA	Property Tax ($205K home)	Effective Rate
$50,000	$3,962	$1,496	$3,825	$1,271	21.1%
$75,000	$8,115	$2,471	$5,738	$1,271	23.5%
$100,000	$13,615	$3,446	$7,650	$1,271	26.0%

Cost of Living Breakdown

Category	Arkansas Index	National Average	Annual Savings vs National
Housing	65	100	$5,880
Groceries	92	100	$400
Transportation	92	100	$800
Healthcare	90	100	$500
Utilities	92	100	$320
Overall	87	100	$7,900

Best Area: Northwest Arkansas

Metric	NWA Corridor	Arkansas Average	National Average
Median household income	$72,500	$56,335	$87,460
Median home price	$335,000	$205,000	$412,000
Unemployment rate	2.4%	3.4%	3.7%
Major employers	Walmart, Tyson, J.B. Hunt, Arvest	—	—
Population growth (5-year)	+12%	+2%	+3%
Cost of living index	93	87	100

Arkansas Pros and Cons

Financial Pros	Financial Cons
Lowest cost of living (BEA 2024 price parities)	48th in median household income
Very affordable housing (median $205K)	High sales tax (9.45% avg)
Declining income tax (heading to 3.5%)	Limited high-paying job markets outside NWA
Low property taxes (0.62%)	Below-average healthcare access
No Social Security tax	Higher poverty rate than national average
NWA is a booming economic corridor	Rural areas have limited opportunities

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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