Arizona Salaries 2025
Tech boom state with flat 2.5% income tax
Median Household Income
Arizona Salary Overview 2025
Arizona has emerged as one of America's fastest-growing states, attracting California refugees, tech companies, and semiconductor manufacturing at unprecedented rates. The state's median household income of $65,900 is steadily rising, driven by high-paying technology, aerospace, and finance jobs relocating to the Phoenix metro.
Arizona's 2021 tax reform created a flat 2.5% income tax—among the lowest in the nation—making it exceptionally attractive for high earners fleeing California's 13.3% top rate. Combined with no estate tax, reasonable cost of living, and 300+ days of sunshine, Arizona offers compelling lifestyle and financial advantages.
The semiconductor boom has transformed Arizona's economy. Intel's massive Chandler expansion, TSMC's new fabs in North Phoenix, and dozens of suppliers are creating thousands of high-paying engineering and technician jobs. Healthcare, aerospace (Honeywell, Raytheon), and financial services continue strong growth. For comprehensive salary data, see salary trends 2025.
Arizona Salary Snapshot
| Metric | Arizona | National Average |
|---|---|---|
| Median Household Income | $65,900 | $74,580 |
| Mean Household Income | $89,500 | $97,300 |
| Per Capita Income | $36,200 | $37,638 |
| Minimum Wage (2025) | $14.35/hr | $7.25/hr (federal) |
| Cost of Living Index | 102 (2% above avg) | 100 |
| State Income Tax | 2.5% flat | Varies |
Salaries by Arizona Metro Area
Phoenix Metro – Economic Powerhouse
Median Household Income: $72,000
Greater Phoenix is America's 5th largest metro and one of its fastest-growing. The semiconductor cluster (Intel, TSMC, NXP, ON Semi) drives tech employment, with process engineers earning $95,000-$150,000 and fab technicians $50,000-$80,000. Financial services (American Express, Charles Schwab, Fidelity regional operations) offer competitive salaries. Healthcare systems (Banner Health, HonorHealth, Dignity Health) are major employers.
Scottsdale – Affluent Finance Hub
Median Household Income: $98,000
Scottsdale attracts wealth management, fintech, and corporate headquarters. Major employers include CVS Health (Aetna), Axon (public safety tech), GoDaddy, and numerous financial firms. Tech salaries match or exceed Phoenix; executive compensation is higher. The resort and hospitality industry provides substantial employment. Housing costs ($550,000+ median) reflect the affluent demographic.
Chandler/Gilbert – Tech Corridor
Median Household Income: $95,000
Chandler and Gilbert form Arizona's tech heartland. Intel's massive campus employs 12,000+, with expansion adding thousands more. Nearby companies include PayPal, Microchip Technology, and numerous semiconductor suppliers. Engineers $90,000-$160,000, technicians $55,000-$85,000. Excellent schools and family-oriented communities attract tech workers. Housing ($480,000 median) remains accessible compared to California.
Tempe – ASU & Startup Scene
Median Household Income: $62,000
Arizona State University (80,000+ students) anchors Tempe's economy. The startup ecosystem, fed by ASU talent, has grown substantially. Faculty salaries $75,000-$180,000; research positions $55,000-$110,000. Downtown Tempe attracts young professionals with urban living and Mill Avenue nightlife. Lower household incomes reflect the student population.
Tucson – University & Defense
Median Household Income: $52,000
Tucson offers dramatically lower costs than Phoenix with significant aerospace/defense (Raytheon Missiles & Defense is the largest employer), University of Arizona, and bioscience. Engineers at Raytheon earn $85,000-$140,000. UA faculty $70,000-$160,000. Housing ($320,000 median) is Arizona's best value among major metros. The smaller city appeals to those preferring quieter lifestyle.
| Metro Area | Median Income | Cost of Living | Key Industries |
|---|---|---|---|
| Phoenix | $72,000 | 103 | Tech, Healthcare, Finance |
| Scottsdale | $98,000 | 120 | Finance, Tech HQs, Resorts |
| Chandler/Gilbert | $95,000 | 108 | Semiconductors, Tech |
| Tempe | $62,000 | 105 | Education, Startups |
| Tucson | $52,000 | 92 | Defense, University, Bioscience |
Top Paying Industries in Arizona
Semiconductor Manufacturing
Arizona's semiconductor boom is transforming the state. Intel's $20B expansion, TSMC's $40B investment, and supplier network create thousands of jobs. Process engineers $100,000-$160,000, equipment engineers $90,000-$140,000, fab technicians $55,000-$85,000. The industry offers clear career paths from technician to engineer to management.
Aerospace & Defense
Raytheon (Tucson), Honeywell (Phoenix), Boeing, and numerous suppliers employ tens of thousands. Defense engineers $90,000-$150,000, program managers $110,000-$170,000. Security clearances command premiums. Luke Air Force Base and Davis-Monthan AFB provide military employment.
Financial Services
Major operations include Charles Schwab (expanding after TD Ameritrade merger), American Express, Discover, USAA regional operations, and numerous wealth management firms. Financial analysts $65,000-$110,000, IT professionals $80,000-$140,000, executives $150,000-$400,000+.
Healthcare
Banner Health (Arizona's largest employer), HonorHealth, Dignity Health, and Mayo Clinic Arizona drive healthcare employment. Physicians $260,000-$450,000+, nurses $70,000-$95,000, specialized practitioners command premiums. The aging population ensures continued growth.
| Industry | Entry Level | Mid-Career | Senior Level |
|---|---|---|---|
| Semiconductor Engineering | $85,000 | $120,000 | $160,000+ |
| Aerospace/Defense | $75,000 | $110,000 | $150,000+ |
| Software Engineering | $80,000 | $115,000 | $155,000+ |
| Financial Services | $55,000 | $90,000 | $140,000+ |
| Nursing (RN) | $65,000 | $80,000 | $95,000+ |
Arizona Tax Advantage
Flat 2.5% Income Tax
Arizona's 2021 tax reform created one of America's lowest income tax rates—a flat 2.5% on all income levels. This provides massive savings compared to California and other high-tax states:
| Annual Salary | AZ Tax (2.5%) | CA Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $1,875 | $4,800 | $2,925 |
| $100,000 | $2,500 | $7,100 | $4,600 |
| $150,000 | $3,750 | $12,500 | $8,750 |
| $200,000 | $5,000 | $18,200 | $13,200 |
| $500,000 | $12,500 | $55,000 | $42,500 |
Other Tax Considerations
Sales Tax: State rate is 5.6%, with local additions pushing totals to 7-10% depending on city. Phoenix is 8.6%.
Property Tax: Arizona property taxes average 0.62% of assessed value—below national average. The Limited Property Value system caps increases.
No Estate Tax: Arizona does not impose state estate or inheritance taxes.
California Refugee Math
A California worker earning $200,000 moving to Arizona saves approximately:
• State income tax: $13,200/year
• Housing costs (varies): $1,000-$2,000/month potential savings
• Net annual benefit: $25,000-$40,000 in many cases
Arizona Cost of Living Analysis
| Expense | Arizona | National Avg |
|---|---|---|
| Housing Index | 105 | 100 |
| Median Home Price | $430,000 | $420,000 |
| Median Rent (2BR) | $1,550 | $1,400 |
| Groceries Index | 97 | 100 |
| Utilities Index | 103 | 100 |
| Transportation Index | 100 | 100 |
| Healthcare Index | 95 | 100 |
Housing by Area
| Area | Median Home | Median Rent (2BR) |
|---|---|---|
| Phoenix (average) | $440,000 | $1,550 |
| Scottsdale | $750,000 | $2,200 |
| Chandler/Gilbert | $520,000 | $1,800 |
| Tempe | $450,000 | $1,650 |
| Tucson | $320,000 | $1,200 |
| Mesa | $420,000 | $1,500 |
Arizona housing costs have risen significantly since 2020 but remain 30-50% below comparable California markets. Tucson offers the best value for those willing to live outside Phoenix metro.
Highest Paying Jobs in Arizona 2025
| Occupation | Average Salary | Top 10% Earn |
|---|---|---|
| Physicians/Surgeons | $290,000 | $450,000+ |
| Dentists | $180,000 | $280,000+ |
| IT Directors | $155,000 | $200,000+ |
| Semiconductor Engineers | $135,000 | $175,000+ |
| Pharmacists | $125,000 | $150,000+ |
| Software Architects | $145,000 | $190,000+ |
| Financial Managers | $130,000 | $185,000+ |
| Aerospace Engineers | $115,000 | $155,000+ |
| Nurse Practitioners | $115,000 | $140,000+ |
| Construction Managers | $105,000 | $145,000+ |
The Semiconductor Boom
Arizona's semiconductor investment is transforming the state's economy:
Major Investments
Intel (Chandler): $20B expansion adding two new fabs, 3,000+ direct jobs plus 15,000+ construction and supplier jobs.
TSMC (North Phoenix): $40B for multiple fabs manufacturing advanced chips. 4,500+ direct jobs when fully operational.
Suppliers: Dozens of equipment and materials suppliers establishing Arizona operations to support fabs.
Semiconductor Salaries
| Role | Entry | Experienced |
|---|---|---|
| Process Engineer | $90,000 | $150,000+ |
| Equipment Engineer | $85,000 | $135,000+ |
| Yield Engineer | $95,000 | $145,000+ |
| Fab Technician | $50,000 | $80,000+ |
| Manufacturing Manager | $110,000 | $170,000+ |
Semiconductor manufacturing offers career paths from technician (community college training) to engineer (bachelor's/master's) to management. The 24/7 fab environment means shift work for many positions.
Frequently Asked Questions
Is Arizona a good state for tech careers?
Increasingly yes. The semiconductor boom, California company relocations, and organic startup growth have created a legitimate tech hub. Salaries are 10-20% below Bay Area but costs are 40-50% lower. The flat 2.5% tax rate is a major advantage for high earners.
How hot is Arizona really?
Phoenix summers are extreme—110°F+ is common June-September. However, low humidity makes it more tolerable than comparable temperatures in humid climates. Air conditioning is essential and relatively affordable. Winters are spectacular (60-70°F, sunny). Many residents adopt "summer hibernation" patterns—early mornings, pool time, indoor afternoons.
Phoenix vs. Tucson: which is better?
Phoenix offers more jobs, higher salaries, and big-city amenities. Tucson is 30-40% cheaper, has a university-town vibe, and milder summers (still hot, but 5-10°F cooler). Defense workers may prefer Tucson (Raytheon); tech workers typically choose Phoenix. Tucson appeals to those prioritizing value and slower pace.
Is Arizona good for remote workers?
Excellent. The flat 2.5% tax rate, reasonable cost of living, and sunshine attract remote workers. Phoenix has good airport connections. The lifestyle suits active outdoor types (hiking, golf, pools). Consider Tucson for maximum value or Flagstaff for mountain living and cooler summers.
What about water and climate concerns?
Arizona faces long-term water challenges, particularly with Colorado River allocations. Major metros have invested in water infrastructure and recycling. Individual homes/communities may face restrictions on outdoor watering. Prospective residents should research water issues; they're real but manageable for now.