Texas Tax Guide

⚠️ Important Disclaimer

This guide is for general informational purposes only and provides simplified overviews and estimates. It does not provide tax, legal, payroll, accounting, or financial advice.

Tax rules can change, and actual paycheck amounts may vary based on your employer, benefit elections, filing status, local taxes, deductions, credits, garnishments, and withholding elections. This guide does not cover every possible tax scenario.

For personalized tax advice, please consult a qualified tax professional.

For official guidance, review materials from the Texas Comptroller of Public Accounts and the Internal Revenue Service (IRS).

Last reviewed: June 2026

Texas at a Glance

Texas is one of nine states with no individual income tax, a prohibition enshrined in the Texas constitution. No state income tax is withheld from your paycheck.

Texas relies on a 6.25% state sales tax (plus local additions up to 2%), property taxes, and a franchise (business margin) tax for state revenue.

Key Tax Facts for Texas

State Income Tax

None

Federal Brackets

10% – 37%

Social Security

6.2%

Medicare

1.45%

SS Wage Base

$184,500

How Your Texas Paycheck Is Calculated

Every paycheck goes through the same basic pipeline from gross pay to the net amount that hits your bank account:

Gross Pay — Your total earnings for the pay period. For hourly workers this is (hours × rate) plus any overtime or double-time premiums. For salaried employees it’s your annual salary divided by the number of pay periods.
Pre-Tax Deductions — Contributions to 401(k), 403(b), HSA, or FSA are subtracted before income taxes are calculated. These lower your taxable wages but Social Security and Medicare still apply to the full gross in most cases.
Federal Income Tax — Withheld using the IRS Publication 15-T percentage method based on your W-4 filing status, credits, and additional withholding elections. For 2026, rates range from 10% to 37%.
State Income Tax — Texas has no state income tax, so nothing is withheld for state income tax from your paycheck.
FICA Taxes — Social Security (6.2% on wages up to $184,500) and Medicare (1.45% on all wages). If your year-to-date earnings exceed the Social Security wage base, that portion stops being withheld.
Net Pay (Take-Home) — What’s left after all taxes and deductions. This is the amount deposited into your account each pay period.

Good to Know

Review your W-4 periodically. If you consistently receive a large refund, you may be over-withholding. Consider reviewing your W-4 Step 3 credits or Step 4(b) deductions to better align your withholding with your actual tax liability. The IRS Tax Withholding Estimator can help.
Benefits of contributing to a 401(k) or 403(b). Pre-tax retirement contributions can reduce your federal and state taxable income for the year. Even a modest percentage — say 3% to 6% — may noticeably lower your tax withholding while building long-term savings. Consult your plan administrator or a financial advisor for guidance.
Benefits of an HSA if you’re eligible. Health Savings Accounts offer a rare triple tax advantage — contributions lower your taxable income now, the balance grows tax-free, and withdrawals for qualified medical expenses are also tax-free. If you’re enrolled in a qualifying high-deductible health plan, an HSA is one of the most tax-efficient savings tools available.
Texas tax note. Texas has no state individual income tax, which is enshrined in the Texas constitution.
Texas tax note. Texas has a 6.25% state sales tax (plus local additions up to 2%) and relies heavily on property taxes for local revenue.
Texas tax note. Texas’s lack of income tax makes it a popular destination for businesses and individuals relocating from higher-tax states.

Frequently Asked Questions

Does Texas have a state income tax?

No. Texas does not levy a state individual income tax. This prohibition is written into the Texas constitution.

What taxes does Texas have instead?

Texas relies on a 6.25% state sales tax (plus local additions up to 2%), property taxes, and franchise (business margin) taxes for revenue.

Is retirement income taxed in Texas?

No. Since Texas has no income tax, all retirement income — Social Security, pensions, 401(k), IRA — is state-tax-free.

Sources

The information in this guide is based on the following official and publicly available sources. Always verify current rates and rules before making financial decisions.