Texas Paycheck Calculator

Texas does not impose a state income tax on wages. Residents only pay federal income tax and FICA (Social Security 6.2% + Medicare 1.45%). This makes Texas one of the most tax-friendly states for workers.

In addition to Texas state tax, all workers pay federal income tax (10%—7% progressive brackets) and FICA taxes (7.65% combined). Use our calculator above to see your complete tax breakdown.

Texas is one of nine U.S. states with no state income tax, making it a popular destination for professionals and businesses seeking to maximize take-home pay. The Texas Comptroller of Public Accounts administers state taxes, and while there is no income tax, the state relies heavily on sales taxes and property taxes to fund government operations.

Texas Property Tax Context: Despite the lack of income tax, Texas has some of the highest property tax rates in the nation. The average effective property tax rate in Texas is around 1.8%—.2% of home value, which can be substantial in rapidly appreciating markets. Property taxes are administered by local counties and school districts. Homestead exemptions are available to reduce taxable value for primary residences.

Business-Friendly Features: Texas has no corporate franchise tax for most businesses (the Margin Tax was effectively repealed in 2024 for many entities). The state has no inventory tax. However, businesses do pay federal payroll taxes and may be subject to local business personal property taxes on equipment and furnishings.

Local Tax Considerations: While there is no local income tax, Texas cities and counties levy sales taxes up to 2% on top of the state rate of 6.25%, bringing total sales tax to up to 8.25% in some areas. Some cities also levy additional hotel occupancy taxes and other levies.

Texas is the largest U.S. state with zero state income tax, attracting businesses and workers from higher-tax states. The economy is the second-largest in the U.S., powered by energy, technology (Austin), aerospace, and agriculture.