Free Texas Payroll Tax Calculator and TX Tax Rates

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    Pay Details

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    Exemptions

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    Federal Information

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    State Information

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    Locale Information

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    Voluntary Deductions

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    Calculate Paycheck

Welcome to our payroll calculator!

Before we jump in, who are you using this calculator for?

Thanks!

Our calculators are designed for employers, and they’ll ask for information you may not have. For a better experience, please check out this employee-focused paycheck calculator.

How much did your employee earn?

Gross Pay: This is the total amount of wages your employee earned before taxes and deductions are withheld.


For salaried employees, gross pay equals their annual salary divided by the number of pay periods per year. For hourly employees, gross pay equals the number of hours worked multiplied by their hourly wage.


(Don’t forget to add on any tips, commissions, or bonuses!)

Gross Pay Method: Is the gross pay amount based on your employee’s annual compensation, or by how many hours they worked in the last pay period?

Gross Pay YTD: Enter the total gross pay your employee has earned this year, prior to this paycheck. Normally, this can be found on the last pay stub.

Pay Frequency: How often do you normally issue paychecks?

Check Date: Enter the check date that should appear on your paycheck.

Is your employee exempt from any taxes?

Federal: In some cases, public and governmental employees are exempt from federal taxes. Check “yes” if your employee is exempt and Federal taxes should not be deducted.

FICA: In some cases, public and governmental employees are exempt from FICA. Check “yes” if your employee is exempt and FICA taxes should not be deducted.

Medicare: In some cases, public and governmental employees are exempt from Medicare taxes. Check “yes” if your employee is exempt and Medicare taxes should not be deducted.

Please enter your employee’s withholding information.

2020 W4: Would you like to use the 2020 withholding tables? Here’s an article that covers the 2020 W-4 updates if you aren’t sure.

Federal Filing Status: Select your employee’s filing status for federal withholding. This helps determine how much federal tax will be withheld.

Two Jobs: If the employee indicated that they have more than one job or are married and filing jointly with a working spouse, select Yes here.

Dependents Amount: Enter the amount your employee listed on Line 3 of their W-4, if any. This is where they claim dependents.

Other Income: If your employee listed another other income on line 4(a) of their W-4, enter the amount here.

Deductions: Enter any deductions that your employee listed on line 4(b) of their W-4, if applicable.

Additional Federal Withholding: If your employee has asked to have additional funds withheld from each paycheck, enter the amount here. If they have not, enter “0”.

Round Federal Withholding: Would you like us to round your employee’s withholding totals to the nearest dollar? (It’s not required, but it is permitted)

Now, add information for their state.

State: Select the state where withholding should be calculated. It should be the same state where the work was performed.

Now, add locale information if applicable.

Does your employee have any voluntary deductions?

Please add any additional deductions for items like health insurance, 401(k), HSAs/FSAs, or any other benefits.


Select type of deduction needed:

401(k)

Add deduction

HSA

Add deduction

Custom

Add deduction

Let’s finish crunching the numbers!

Click the button below to see your paycheck calculated.

Here’s your paycheck information:

Leave payroll to us.

We do all the hard work to set you up for just $40 + $6 per employee.

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Updated: January 1, 2024

Payroll taxes in Texas are some of the smallest in the nation. Since there’s no state income tax in the Lonestar State, small business owners only have to contend with federal taxes. That means your job calculating payroll is much easier than employers in other states.

Fast facts about payroll taxes in Texas

  • Texas has no state income tax, but employers must pay unemployment and disability taxes.
  • Employers in Texas pay unemployment taxes based on business size and history of unemployment claims.
  • Employers must withhold federal income tax, Social Security tax, and Medicare tax from employees’ paychecks.
  • Texas uses the federal minimum wage rate of $7.25 per hour.

Federal payroll taxes for Texas employers

Though Texas-specific payroll taxes are a less of a tightrope, you still have the nuisance that is federal payroll taxes. But, the good news is our Texas payroll calculator at the top of this page can figure out federal payroll tax withholding and any other taxes your business needs to pay.

 

Here’s what you need to know when you’re calculating federal payroll taxes. For a more in-depth discussion of each of the federal payroll tax items, see our step-by-step guide to calculating employee payroll taxes.

  • Gross Wages:
    • For all your hourly employees, multiply their hours worked by the pay rate…and don’t forget to add any overtime hours worked!
    • For all your employees on salary, divide each employee’s annual salary by the number of pay periods per year.
  • Deduct Pre-Tax Withholdings if your employees contribute to 401(k), FSA, or other pre-tax withholdings. Simply subtract their contributions from gross wages before applying payroll taxes. Or you might consider using payroll software that allows you to automate these types of deductions.
  • Deduct Federal Income Tax, which ranges from 0% to 37%. Detailed withholding information can be found through the IRS website.
  • Deduct FICA Taxes (and Match):
    • For Social Security tax, withhold 6.2% of each employee’s taxable wages up until they have earned a total of $168,600 for the year. As an employer, you also need to pay this tax.
    • For Medicare tax, withhold 1.45% of each employee’s taxable wages up until they have reached a total earning of $200,000 for that year. You will also pay this tax. For employees who make salaries above $200,000, withhold an Additional Medicare Tax of 0.9%. Only the employee is responsible for paying the Additional Medicare Tax.
  • Pay FUTA Unemployment Tax, which is 6% of the first $7,000 of taxable income. If you pay state unemployment taxes on time and in full, you are eligible for a tax credit of up to 5.4%. Only employers are responsible for paying FUTA taxes.
  • Subtract Post-Tax Deductions, such as child support, court-ordered wage garnishments, etc. If applicable, you will receive a letter from the court stating the amount of the deduction.
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Texas Unemployment Insurance

While there’s no state income tax in Texas, there’s a variety of other taxes you should make sure are taken care of. Currently, Texas unemployment insurance rates range from 0.31% to 6.31% with a taxable wage base of up to $9,000 per employee per year in 2024. New employers should use the greater of the average rate for all employers in the NAICS code or use 2.7%.

 

To figure out your Effective Tax Rate, simply add these 5 components: General Tax Rate (GTR) + Replenishment Tax Rate (RTR) + Obligation Assessment Rate (OA) + Deficit Tax Rate (DTR) + Employment Training Investment Assessment (ETIA).

 

You can also use the Texas Workforce Commission’s unemployment benefits estimator if you want to estimate your Texas Unemployment Insurance benefits.

Through only businesses in Texas that contract with government entities are required to buy workers’ compensation coverage, the state still recommends private employers consider getting a policy. Learn more in our employer’s guide to the Texas workers’ comp and why its worth a closer look.

Reporting new hires in Texas

Federal and state law requires employers to report new hires and rehires within 20 calendar days of the employee’s first day on the job (which is also the day the employee starts earning wages). New hires can be reported online through Texas’s employer portal.

 

Are you a multi-state employer? Be sure to select Texas as your reporting state. According to the attorney general’s website, it is the only way the Texas Workforce Commission (TWC) can receive new hire information on Texas residents who may be:

 

  • Receiving unemployment benefits and
  • Working for a multi-state employer.

Now Write Your Employees’ Paychecks!

You’ve figured out all your payroll needs, so now you can make your small business stand out in the big state of Texas. Get your signature ready because after you’ve calculated your employees’ net pay by implementing all deductions, it’s time to write those checks.

 

All you have to worry about is paying your employees on time and setting aside any taxes your company is responsible for (FICA and UI payments, we’re looking at you).

 

You need to fill out Forms 940 (annually) and 941 (quarterly), but if you prefer ongoing fulfillment, payment can be made via the EFTPS payment system. Find further information on the IRS here.

Additional TX Payroll Tax Resources:

If you’re still looking to fill your brain with more juicy payroll tax facts, here are some additional resources and contact information for those who know Texas payroll like the back of their hand:

 

The Texas Comptroller of Public Accounts: All the phone numbers you may need.

 

Employer and Tax Information directly from the Secretary of State himself, and a phone number for good measure: (512) 463-5555.

 

These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.

More helpful payroll calculators

Employers in Texas can use the calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions (and feel confident when cutting paychecks). But every now and then, employers run into situations that require a bit more wrangling. For example, do your high-performing employees receive bonuses from time to time? Remember that Uncle Sam considers this type of payment to be supplemental wages and requires taxes to be withheld. Also, if you have workers who come and go, there may be times when you need to figure out what their final paycheck will be. So, if you can use a little more help managing the math, check out some of the calculators listed below.

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Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.

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