Calculating payroll in the Lone Star State is unique compared to most of the United States. Because Texas is one of the few states with no state income tax, employees generally see a higher percentage of their gross earnings in their take-home pay. However, federal obligations still apply to every paycheck.
Texas Payroll Tax Components
Even though Texas doesn't take a cut, the federal government does. Your paycheck is subject to the following deductions:
FICA Social Security: Currently set at 6.2% of your gross pay, up to the annual wage base limit.
FICA Medicare: Set at 1.45% of your gross pay (with an additional 0.9% for high earners over $200,000).
Federal Income Tax: This is based on your earnings, filing status, and the information provided on your W-4 form.
How to Calculate Texas Net Pay
To calculate your net pay in Texas manually, follow these steps:
Determine your Gross Pay for the period (Hours worked multiplied by hourly rate, or annual salary divided by pay periods).
Calculate Social Security: Gross Pay × 0.062.
Calculate Medicare: Gross Pay × 0.0145.
Calculate Federal Income Tax based on the current IRS tax brackets and your filing status.
Subtract all the above from your Gross Pay.
Example Calculation
If you live in Houston and earn a gross salary of $5,000 per month filing as Single:
Gross Pay: $5,000.00
Social Security (6.2%): $310.00
Medicare (1.45%): $72.50
Estimated Fed Tax: ~$615.00 (varies by deductions)
Total Take-Home: ~$4,002.50
Frequently Asked Questions
Does Texas have a local income tax? No, Texas law prohibits local jurisdictions (cities or counties) from imposing their own income taxes on residents.
What is the Texas SUI tax? State Unemployment Insurance (SUI) is a tax paid by the employer, not the employee. It does not reduce your take-home pay.
function calculateTexasPayroll() {
var gross = parseFloat(document.getElementById("grossPay").value);
var freq = parseFloat(document.getElementById("payFrequency").value);
var filing = document.getElementById("filingStatus").value;
var allowances = parseInt(document.getElementById("allowances").value) || 0;
if (isNaN(gross) || gross <= 0) {
alert("Please enter a valid gross pay amount.");
return;
}
// Period Calculations
var periodGross = gross;
var annualGross = gross * freq;
// FICA Calculations
var ssTax = periodGross * 0.062;
var medTax = periodGross * 0.0145;
// Simplified Federal Income Tax Calculation (2024 Estimates)
// Annual Standard Deduction
var standardDeduction = (filing === "single") ? 14600 : 29200;
var allowanceValue = allowances * 4300; // Rough legacy allowance estimate
var taxableIncome = annualGross – standardDeduction – allowanceValue;
if (taxableIncome < 0) taxableIncome = 0;
var fedTaxAnnual = 0;
if (filing === "single") {
if (taxableIncome <= 11600) fedTaxAnnual = taxableIncome * 0.10;
else if (taxableIncome <= 47150) fedTaxAnnual = 1160 + (taxableIncome – 11600) * 0.12;
else if (taxableIncome <= 100525) fedTaxAnnual = 5426 + (taxableIncome – 47150) * 0.22;
else if (taxableIncome <= 191950) fedTaxAnnual = 17168 + (taxableIncome – 100525) * 0.24;
else fedTaxAnnual = 39110 + (taxableIncome – 191950) * 0.32;
} else {
if (taxableIncome <= 23200) fedTaxAnnual = taxableIncome * 0.10;
else if (taxableIncome <= 94300) fedTaxAnnual = 2320 + (taxableIncome – 23200) * 0.12;
else if (taxableIncome <= 201050) fedTaxAnnual = 10852 + (taxableIncome – 94300) * 0.22;
else fedTaxAnnual = 34337 + (taxableIncome – 201050) * 0.24;
}
var fedTaxPeriod = fedTaxAnnual / freq;
var netPay = periodGross – ssTax – medTax – fedTaxPeriod;
// Display Results
document.getElementById("resGross").innerText = "$" + periodGross.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resSS").innerText = "-$" + ssTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resMed").innerText = "-$" + medTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resFed").innerText = "-$" + fedTaxPeriod.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resNet").innerText = "$" + netPay.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("txResultBox").style.display = "block";
}