Texas Paycheck Calculator: Estimate Your Take-Home Pay After Taxes

Texas Paycheck Calculator: Why Working in a No-Income-Tax State Doesn’t Mean It’s Tax-Free

Texas is home to some of the fastest-growing job markets in the country. Energy corridors around Houston, the Texas Medical Center, and the I-35 logistics corridor all drive hiring. Texas gained the most nonfarm jobs of any state in 2025 and set records for total employment.

One of the most frequently cited advantages of working in Texas is that there is no state income tax. But that doesn’t mean your paycheck is tax-free — federal income tax and FICA (Social Security and Medicare) still apply to every dollar you earn.

What comes next is a step-by-step look at how your Texas paycheck is calculated, including what gets withheld, what does not, and why your take-home number might be different from what you expect.

Disclaimer: This page is for informational purposes only and is not tax advice. Tax rules can change, and individual situations vary. For personal tax questions, consider speaking with a qualified tax professional.

How your Texas paycheck is calculated

Texas does NOT levy a state income tax on wages. This is a constitutional prohibition — the Texas Constitution (Article 8, Section 24-a), ratified by voters as Proposition 4 in November 2019, permanently bans a personal income tax. That means only federal income tax and FICA (Social Security and Medicare) are withheld from your paycheck. There is no state withholding form, no state bracket table, and no state-level payroll deduction. Each step below covers what does come out of your pay.

Part 1: Your gross pay per paycheck

Gross pay is your total earnings before any deductions are applied. For hourly workers, that includes regular hours and any overtime pay. For salaried employees, it’s the fixed amount you receive each pay period.

Texas follows the federal minimum wage of $7.25 per hour. Tipped employees receive a base wage of $2.13 per hour before tips, and a youth minimum wage of $4.25 per hour applies to workers under 20 during their first 90 calendar days. Texas does not allow cities or counties to set a higher local minimum wage.

Gross pay is the starting point for calculating taxable income — your gross pay minus any pre-tax deductions such as retirement contributions. Consider these factors:

• Hourly workers: regular hours + overtime pay
• Salaried workers: fixed pay per period
• Overtime: Texas follows the federal 40-hours-per-week standard for overtime eligibility

Part 2: Federal withholding and the W-4

In Texas, the W-4 is the ONLY withholding form you need. There is no state equivalent. Your W-4 determines how much federal income tax is withheld from each paycheck, based on your filing status, income, and any adjustments you claim. If you do not submit a W-4, your employer defaults to single filer with no adjustments.

Federal withholding uses progressive brackets based on income and personal status. You can use the IRS Tax Withholding Estimator to check whether your current W-4 selections are on track.

Part 3: Social Security and Medicare (FICA) tax impacts

In Texas, where no state income tax applies, FICA is one of the most significant deductions on your pay stub. Social Security and Medicare taxes — together called FICA (Federal Insurance Contributions Act) — are withheld from every paycheck at fixed federal rates.

• 6.2% for Social Security
• 1.45% for Medicare on all covered wages

Your employer matches both these contributions.

Additionally, employers must withhold a 0.9% Additional Medicare tax once wages paid to an employee exceed $200,000 in a calendar year. Your final liability is reconciled on your tax return based on filing status. This surcharge is not employer-matched.

Part 4: No state income tax and what that means

Texas’s constitution (Article 8, Section 24-a), ratified as Proposition 4 in November 2019, prohibits a state income tax on individual wages. This is not simply a policy choice — it’s a constitutional prohibition, which means it cannot be changed by the legislature alone.

The Texas Comptroller administers more than 100 state taxes and fees, but none of them is a personal income tax. There are also no local income taxes in Texas. Whether you work in Houston, Dallas, San Antonio, or Austin, no city or county imposes an income tax on employee wages.

At Texas’s median household income of $79,721, the combined federal income tax and FICA withholding totals roughly $14,055–$14,750 per year. Compare that to a worker in New Mexico earning the same amount, who would pay an additional ~$3,000 per year in state income tax alone — roughly $200+ per month more in deductions.

While Texas has no income tax on wages, the state does have a combined state and local sales tax of up to 8.25% in major metros and effective property tax rates of 1.60%–1.80% — among the highest in the nation. These are not payroll deductions, but they affect purchasing power.

Where does your income fall in Texas? (Median income overview)

Median household income provides a useful benchmark for understanding where most Texas workers fall relative to the national picture.

Texas’s median of $79,721 sits slightly below the national median of $81,604. But Texas’s lack of state income tax means more of that income stays in your paycheck compared to workers in most other states.

At the median, a single filer in Texas can expect combined federal income tax of roughly $8,500–$8,700 plus FICA of approximately $6,048 — totaling about $14,550–$14,750 per year. That leaves take-home pay of approximately $64,300–$64,500 before cost-of-living expenses.

4 ways your take-home pay can change

Why does take-home pay feel different in Texas?

Many workers expect a dramatically bigger paycheck in a no-income-tax state, but federal and FICA deductions still apply. At Texas’s median household income of $79,721, combined federal income tax and FICA withholding totals roughly $14,055–$14,750 per year — about $331 per biweekly paycheck in federal tax plus roughly $234 per biweekly paycheck in FICA.

Texas also has some of the highest property taxes in the nation, with effective rates of 1.60%–1.80%. Homeowners feel this directly in their mortgage escrow or annual tax bill.

And while there is no state income tax, Texas’s combined state and local sales tax reaches up to 8.25% in major metros like Houston, Dallas, and San Antonio. No state income tax doesn’t mean no tax burden — it means the burden is structured differently.