Texas pay stubs: state taxes and withholding

State income tax

Texas does not tax personal income, and its constitution bars the legislature from adding one. There is no state income tax line on a Texas pay stub and no state W-4 equivalent. Businesses may owe the Texas franchise tax, but that is a tax on the business, not something withheld from employee wages.

If an employee moves to Texas from a state that does tax income, stop withholding for the old state once they no longer live or work there, and keep a note of the date. With no state line to adjust, the federal W-4 becomes the main way an employee can change their take-home pay.

Other state payroll deductions

Texas has no state disability insurance and no paid family leave payroll program. State unemployment tax is paid by employers to the Texas Workforce Commission and is never deducted from employees. The other lines on a stub are usually:

• Benefit premiums the employee has elected
• Retirement contributions, such as a 401(k)
• Deductions the employee authorized in writing, or court-ordered withholding such as child support

Under the Texas Payday Law, most deductions beyond taxes and court orders need the employee's written authorization, so keep those forms with your payroll records.

Local taxes

Texas cities, counties and school districts do not tax income. Property and sales taxes fund local government instead, and neither shows up on a pay stub.

Federal withholding still applies

• Federal income tax based on Form W-4.
• Social Security at 6.2% up to the annual Social Security wage base.
• Medicare at 1.45% on all wages, plus 0.9% additional Medicare on wages above $200,000.

Creating a Texas pay stub with PayStubNest

Go to /app/new, enter hourly pay and hours or an annual salary, and select Texas. The exact figures on each stub depend on the employee's pay, pay frequency, W-4 choices, deductions and year-to-date totals, and PayStubNest calculates all of it automatically: federal withholding, a state tax line left at zero and year-to-date totals kept in step across the year. Preview the stub free and pay only for the download.

Record-keeping tip

Because a Texas stub has so few tax lines, the pay details themselves carry more weight: pay period dates, hours, rate and every deduction should be clear. The Texas Workforce Commission explains the Payday Law and pay statement expectations, and our FAQ answers common stub questions.