Why Texas paychecks are bigger
Texas is one of the states with no tax on wages, alongside Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington and Wyoming. Your paycheck therefore has three deductions: federal income tax, Social Security and Medicare. There is no state disability insurance and no city income tax anywhere in Texas.
The trade-off is elsewhere: Texas relies on a 6.25% state sales tax (up to 8.25% with local taxes) and on property taxes, which matter if you own a home.
Worked example: $60,000 in Texas
Single, $60,000 salary, paid every two weeks, Texas
Gross pay is $2,307.69 per paycheck. Federal income tax is $193 and Social Security and Medicare $177. Take-home pay is $1,938 per paycheck, or $50,390 a year.
Take-home pay per paycheck$1,938.0726 paychecks a year
- Take-home pay per year
- $50,390
- Federal income tax withheld
- $193.08
- Texas income tax withheld
- $0.00no state income tax on wages
| Item | Per paycheck | Per year |
|---|---|---|
| Gross pay | $2,307.69 | $60,000.00 |
| Federal income tax | −$193.08 | −$5,020.08 |
| Social Security (6.2%) | −$143.08 | −$3,720.08 |
| Medicare (1.45%) | −$33.46 | −$869.96 |
| Take-home pay | $1,938.07 | $50,389.88 |
At $100,000 a year, take-home pay is about $79,180 a year.