What Changes in Your Paycheck in Texas
Your paycheck in Texas is noticeably simpler—there's no Texas state income tax line item at all. This means your take-home pay calculation involves only federal taxes (income tax, Social Security, Medicare) and any pre-tax deductions For a $1 salary, your paycheck won't show the $1-$1 annual state tax deduction you'd see in states with 5%-8% income taxes. However, Texas property taxes mean homeowners will see those costs through mortgage escrow or direct property tax bills—they're just not on the paycheck A homeowner with a $1 property might pay $1-$1+ annually in property taxes (~ $1-$1 monthly), which can offset paycheck savings for property owners.
Texas State Income Tax: $0
Texas has no state income tax. Your paycheck shows only federal taxes.
| Gross Salary | State Tax (Year) | Effective Rate |
|---|---|---|
| $50,000 | $0 | 0% |
| $75,000 | $0 | 0% |
| $100,000 | $0 | 0% |
| $150,000 | $0 | 0% |
Use the calculator above to see your complete take-home pay with federal taxes and deductions.
Is Texas Better for You?
Texas works well for:
Texas works best for high earners who rent rather than own property, have modest spending, and aren't itemizing federal deductions. A dual-income couple earning $1 who rent an apartment and spend modestly might keep $1-$1+ more annually than they would in states with 6%-10% income taxes The lack of state income tax means every additional dollar of income isn't subject to state-level taxation, unlike states where hitting higher brackets means larger tax percentages.
Texas may not be ideal if:
Texas is less advantageous for homeowners (especially those with higher-value properties), lower-income renters who spend a high percentage of income, and anyone who doesn't itemize federal deductions (limiting ability to deduct high property taxes). A homeowner with a $1 property might pay $1-$1+ annually in property taxes, which could exceed what they'd pay in state income tax in progressive states with generous low-income brackets Lower-income renters may pay indirectly through higher rents, while getting fewer direct benefits from the property tax structure.
Key Facts That Affect Your Take-Home Pay
- Texas has no state income tax whatsoever, making paycheck calculation simpler than in income-tax states. Your paycheck shows only federal taxes (income tax, Social Security, Medicare) and pre-tax deductions—no Texas state income tax line item at all.
- Texas relies heavily on property taxes for state revenue, with average effective property tax rates among the highest in the nation at ~ 1.6%-2.0% of home value annually (compared to national averages around 1.0%-1.1%). A homeowner with a $1 property might pay $1-$1+ annually in property taxes.
- Texas has no local income taxes at the city or county level, making paycheck calculation straightforward regardless of work location. , all Texans have the same income tax burden—zero.
- Texas property taxes are not capped at the state level (unlike California's Proposition 13), meaning property taxes can increase annually based on property value assessments and local tax rates. Homeowners may see property tax increases that offset or exceed what they'd pay in state income tax in other states.
Common Mistakes People Make
Misconception: 'No income tax means Texas doesn't tax me at all.' Reality: Texas collects revenue through high property taxes (among the highest in the nation) and sales taxes. A homeowner in Texas with a $1 property might pay $1-$1+ annually in property taxes, which could exceed what they'd pay in state income tax in moderate-tax states Renters pay indirectly through higher rents that reflect property tax costs.
Misconception: 'All zero-tax states are the same financially.' Reality: Texas's property-tax-heavy model creates different financial profiles than zero-tax states like Tennessee (sales tax heavy) or Nevada (gaming/tourism revenue). If you're a homeowner in Texas, you'll likely pay more overall than a homeowner in Tennessee with the same property value, even though both lack state income tax Your property ownership status and spending patterns determine which zero-tax state structure benefits you.
Misconception: 'I'll automatically save thousands by moving from California to Texas.' Reality: Savings depend on income level, property ownership, and spending. High earners ($1+) who rent and spend modestly will likely save $1-$1+ annually. However, homeowners will face property taxes that can offset those savings—a $1 Texas home might incur $1-$1+ annually in property taxes, potentially exceeding what they'd pay in California state income tax at similar income levels Factor in cost-of-living and salary adjustments before relocating.
One Thing to Know
Texas property taxes are among the highest in the nation, but they're not on your paycheck—they come through mortgage escrow or direct bills. Many people moving to Texas for the 'no income tax' benefit are shocked when they see $1-$1+ annual property tax bills, which can offset or exceed what they'd pay in income tax in other states.
Important Notes
These calculations are estimates based on current tax law. Your actual take-home pay varies based on:
- Pre-tax deductions (401(k), health insurance, HSA, etc.)
- Your W-4 withholding elections
- Additional income or deductions at tax time
- Individual circumstances and tax situations
Tax rates are subject to change. Federal and state tax laws may be updated annually. This is not tax advice. For personalized help, consult a tax professional familiar with Texas tax laws.