Texas is one of nine states with no tax on wage income, and the Texas paycheck shows it: gross pay, federal withholding, Social Security, Medicare, and whatever voluntary deductions the employee chose — and no state line at all. The absence is real money. On an $80,000 salary, the federal withholding and FICA deductions are the same as in any state, but a state income tax of 5% elsewhere would take a further $4,000 a year, and in Texas that $4,000 stays in the paycheck. The comparison, however, does not end at the paycheck: Texas funds its government differently, and the property-tax line that replaces the income tax appears on the mortgage payment, not the payslip. This guide prices the paycheck honestly and names where the rest of the bill lands.

No state income tax: what the absence is worth

Article VIII, Section 24 of the Texas Constitution prohibits a state tax on personal income, and no Texas paycheck has ever carried a state withholding line. The practical consequence is a paycheck whose mandatory deductions are federal only: federal income-tax withholding, Social Security, and Medicare. For a single filer earning $80,000 in 2026 with the standard W-4, federal withholding runs to roughly $8,770 of annual tax on $63,900 of taxable income (after the $16,100 standard deduction) — the withholding tables spread that across the year — and FICA adds $6,120, for a combined mandatory load of about $14,890 and take-home pay of about $65,110 before voluntary deductions. The same salary in a state with a flat 5% income tax would lose a further $4,000, and in a progressive-tax state more; the Texas premium is that difference, every year, for the whole career.

The premium is not free money. Texas raises the revenue other states raise from income tax substantially from property tax and sales tax instead — a combined state and local sales-tax rate up to 8.25%, and property-tax rates commonly 1.6% to over 2.2% of appraised value. A homeowner’s property tax is the income tax, relocated: on a $400,000 home at 1.8%, $7,200 a year, paid through mortgage escrow rather than withholding. Renters pay it inside the rent. The honest comparison between a Texas salary and a salary elsewhere therefore runs through housing costs as well as the paycheck, and the Texas mortgage calculation on this site prices the property-tax half of that comparison.

FICA in 2026: the wage base, the rates, and the extra Medicare tax

Social Security tax is 6.2% of wages up to the wage base, which is $184,500 for 2026. The maximum employee Social Security tax for the year is therefore $11,439 (6.2% of $184,500), and wages above the base are exempt from Social Security tax for the rest of the year — the deduction stops appearing on the payslip once cumulative wages pass the base, typically in the autumn for high earners, and resumes in January. Medicare tax is 1.45% of all wages with no cap, and the Additional Medicare Tax of 0.9% applies to wages above $200,000 in the year ($250,000 for married couples filing jointly), withheld by the employer on the excess with no allowance for the employee’s other income or filing status.

On an $80,000 salary the whole salary is under the wage base, so the arithmetic is simple: Social Security 6.2% × $80,000 = $4,960; Medicare 1.45% × $80,000 = $1,160; total FICA $6,120, or $510 a month. The employer pays the matching $6,120, which never appears on the payslip but is part of the cost of the job. Self-employed Texans pay both halves as self-employment tax — 15.3% to the wage base, 2.9% above it, plus the 0.9% additional tax above the thresholds — with half deductible as an adjustment to income. The wage base rises most years with average wages; the 2026 figure should be confirmed against the Social Security Administration’s announcement each autumn, not assumed from the prior year.

Overtime, minimum wage, and the pay rules that are federal in Texas

Texas has no overtime law of its own and no daily-overtime rule. Overtime in Texas is the federal Fair Labor Standards Act: 1.5 times the regular rate for hours worked past 40 in a workweek, for non-exempt employees. The regular rate includes non-discretionary bonuses, shift differentials and most other payments, not just the hourly rate, and the 40-hour threshold is weekly — a 12-hour day is not overtime by itself, and a 45-hour week is five hours of overtime even if no single day exceeded eight hours. Salaried exempt employees — executive, administrative and professional employees meeting the duties tests and the salary threshold — are outside the overtime rule, and misclassification of a non-exempt worker as exempt is the commonest wage error in the state.

The minimum wage in Texas is the federal $7.25 an hour, unchanged since 2009; Texas has no higher state minimum. Tipped employees may be paid a cash wage of $2.13 an hour with a tip credit to $7.25, and the employer must make up any shortfall in a week when tips do not reach the minimum. Final pay on separation has no Texas deadline statute of its own beyond the requirement that wages be paid as agreed, and the Texas Payday Law (Labor Code Chapter 61) governs the timing and the deductions an employer may make: deductions need written authorisation except where the law requires or permits them, and a deduction that takes pay below the minimum wage is unlawful whatever the employee signed.

The voluntary deductions: retirement, health, and the paycheck you control

Past the mandatory deductions, the paycheck is the employee’s to shape. Pre-tax 401(k) contributions reduce federal withholding and FICA’s wage base only for income tax, not for Social Security and Medicare — a distinction worth knowing, because a 401(k) contribution lowers the income-tax line but leaves the FICA lines untouched, while a Section 125 cafeteria-plan premium for health insurance reduces all three. Health Savings Account contributions through payroll reduce income tax and FICA alike, which is part of why the HSA is the most tax-advantaged account in the code for an employee with a qualifying high-deductible plan.

Two habits keep the Texas paycheck accurate. First, keep the W-4 current — the federal withholding is the only income-tax line, and it is the one the employee controls, through Steps 2, 3 and 4; a stale W-4 is the commonest cause of a Texas refund or balance due, because there is no state withholding to absorb the error. Second, read the year-to-date columns, not just the period columns: the Social Security wage base is cumulative, the overtime threshold is weekly, and the annual totals are where a payroll error — a missed overtime hour, a deduction that continued past its end date — becomes visible while it can still be corrected in the same year.

Frequently asked questions

Does Texas take state income tax out of paychecks?

No. Texas has no state income tax — the state constitution prohibits one — so no Texas paycheck carries a state withholding line, at any income. The mandatory deductions on a Texas paycheck are federal only: federal income-tax withholding, Social Security at 6.2% to the wage base, and Medicare at 1.45%. Local taxes are not withheld from wages either.

How much FICA tax is withheld in Texas in 2026?

The rates are federal and the same in every state. Social Security is 6.2% of wages up to the $184,500 wage base for 2026 (a maximum of $11,439 for the year). Medicare is 1.45% of all wages, plus the 0.9% Additional Medicare Tax on wages above $200,000 in the year. On an $80,000 salary, FICA totals $6,120: $4,960 Social Security plus $1,160 Medicare.

What is the overtime rule in Texas?

The federal Fair Labor Standards Act: 1.5 times the regular rate for hours worked past 40 in a workweek, for non-exempt employees. Texas has no daily-overtime rule and no overtime law of its own. The regular rate includes non-discretionary bonuses and shift differentials, not just the hourly rate, and the threshold is weekly, not daily.

What is the minimum wage in Texas?

$7.25 an hour, the federal minimum, unchanged since 2009. Texas has no higher state minimum wage. Tipped employees may be paid a cash wage of $2.13 an hour with a tip credit to $7.25, and the employer must make up any shortfall in a week when tips do not reach the minimum.

Why is my Texas take-home pay higher than the same salary elsewhere?

Because no state income tax is withheld. On an $80,000 salary, a 5% state income tax elsewhere would take $4,000 a year that stays in a Texas paycheck. The offset is elsewhere in the cost of living — Texas property taxes and sales taxes are comparatively high — so the full comparison runs through housing costs as well as the paycheck.

Should I adjust my W-4 if I move to Texas?

Yes, if the move changes your tax picture. Federal withholding depends on total income, credits and deductions, not on the state, but a move that ends state withholding changes your cash flow and may change itemised deductions (state taxes are no longer deductible). File a new W-4 with the new employer in any case — a W-4 does not transfer between employers — and check the first payslip to confirm the withholding.