Texas Paycheck Calculator

The Texas Constitution effectively bars a personal income tax — since a 2019 amendment, introducing one would require approval from two-thirds of the legislature and a majority of voters. In practice that makes the absence of an income tax a long-term structural feature rather than a policy that might change with the next budget.

The effect on a paycheck is straightforward. A worker earning $75,000 in Texas keeps roughly $4,000–$4,500 a year more than someone on the same salary in a state with a mid-single-digit income tax rate. That gap widens as income rises, which is why Texas is a common destination for high earners and remote workers comparing states.

What Texas does not avoid is the federal side. Federal income tax still applies across the seven brackets, and FICA still takes 6.2% for Social Security on wages up to the annual wage base plus 1.45% for Medicare on every dollar. For most Texas workers, FICA is the second-largest line on the payslip after federal income tax, and for lower earners it is often the largest.

No income tax does not mean no taxes. Texas funds itself primarily through property and sales taxes, and both run high by national standards. Property tax rates in Texas are among the steepest in the country, frequently exceeding 2% of assessed value in parts of the Dallas–Fort Worth and Houston metros. Sales tax combines a 6.25% state rate with local add-ons up to 2%, for a common total of 8.25%.

This matters when you are comparing job offers across states. A Texas salary genuinely produces a bigger paycheck, but if you buy a house, a meaningful share of that advantage can be handed back through property tax. Renters, by contrast, tend to keep more of the benefit — which is part of why the no-income-tax advantage feels largest to younger workers and people who rent.

Texas also has no local wage or occupational taxes of the kind found in Ohio, Pennsylvania or Maryland. Whatever city you work in, your withholding is the same.

Beyond federal tax and FICA, most of what appears on a Texas payslip is voluntary or employer-specific. Pre-tax 401(k) contributions reduce your federal taxable income but not your Social Security and Medicare wages — a detail many people miss when estimating the value of raising their contribution rate. Health insurance premiums taken under a Section 125 cafeteria plan reduce both, which is why they are the more tax-efficient of the two.

Texas has no state disability insurance programme and no state-run paid family leave levy, so there are no mandatory state payroll deductions to account for. Employers pay state unemployment insurance, but it is an employer cost and is not withheld from your wages.

If you are self-employed in Texas, remember that you owe both halves of FICA as self-employment tax — 15.3% on net earnings up to the Social Security wage base — which the calculator above does not model, since it assumes W-2 employment.