Texas Income Tax Calculator
Texas charges $0 in state income tax — so this tool focuses on what actually comes out of your paycheck: federal tax, Social Security, and Medicare — plus a Tax Health Score, raise calculator, and a side-by-side look at what you’d owe if you lived somewhere else.
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Why Texas Has No State Income Tax
Texas is one of only nine U.S. states that collects no personal income tax, and it’s not just a policy preference — it’s written into the state constitution. Texas voters approved a constitutional amendment in 2019 that makes it extraordinarily difficult to ever introduce one, requiring a statewide voter referendum rather than a simple legislative vote. That means your paycheck here skips a deduction that residents of New York, California, or New Jersey see every pay period, and it applies no matter how much you earn — a software engineer making $300,000 in Austin and a retail worker making $35,000 in El Paso both pay exactly $0 in state income tax.
That doesn’t mean Texas is a low-tax state across the board — it just collects revenue differently. With no income tax to lean on, the state relies heavily on property taxes (the effective rate on owner-occupied homes runs around 1.4%–1.6%, among the highest in the country) and a 6.25% base sales tax that local cities and transit authorities can push up to a combined 8.25%. Businesses, meanwhile, pay a margin-based franchise tax instead of a corporate income tax — but that tax doesn’t touch individual wages at all. For a W-2 employee, the practical result is straightforward: your only payroll withholdings are federal income tax, Social Security, and Medicare.
Good news for retirees and savers: because there’s no state income tax, Texas also doesn’t tax Social Security benefits, pension income, 401(k) or IRA withdrawals, or capital gains at the state level. Whatever the IRS doesn’t take, you keep.
Frequently Asked Questions
Correct — Texas is constitutionally barred from levying a personal income tax. You only owe federal income tax, Social Security, and Medicare on your wages; there is no state withholding line on a Texas paycheck.
Primarily through property taxes (set locally by school districts, cities, and counties) and a statewide sales tax of 6.25% that can reach 8.25% with local add-ons, plus a business franchise tax based on revenue rather than profit.
No. Since Texas has no state income tax, it does not tax Social Security benefits, pensions, 401(k)/IRA distributions, or any other retirement income at the state level — only the IRS taxes that income federally.
No — federal income tax brackets and rates are identical nationwide regardless of which state you live in. The only thing that changes by moving to Texas is the elimination of state-level income tax.
It’s legally very difficult. Since the 2019 constitutional amendment, creating a state income tax would require approval by Texas voters in a statewide election, not just a vote by the legislature.
Yes, relative to many states. Texas’s effective property tax rate on owner-occupied homes averages roughly 1.4%–1.6%, well above the national average, which is how the state offsets having no income tax revenue.
Correct — Texas is constitutionally barred from levying a personal income tax. You only owe federal income tax, Social Security, and Medicare on your wages; there is no state withholding line on a Texas paycheck.
Primarily through property taxes (set locally by school districts, cities, and counties) and a statewide sales tax of 6.25% that can reach 8.25% with local add-ons, plus a business franchise tax based on revenue rather than profit.
No. Since Texas has no state income tax, it does not tax Social Security benefits, pensions, 401(k)/IRA distributions, or any other retirement income at the state level — only the IRS taxes that income federally.
No — federal income tax brackets and rates are identical nationwide regardless of which state you live in. The only thing that changes by moving to Texas is the elimination of state-level income tax.
It’s legally very difficult. Since the 2019 constitutional amendment, creating a state income tax would require approval by Texas voters in a statewide election, not just a vote by the legislature.
Yes, relative to many states. Texas’s effective property tax rate on owner-occupied homes averages roughly 1.4%–1.6%, well above the national average, which is how the state offsets having no income tax revenue.
Methodology: Calculations use the 2025 IRS federal tax brackets, standard deductions, and Child Tax Credit rules, plus 2025 Social Security (6.2% to the $176,100 wage base) and Medicare (1.45% + 0.9% additional Medicare tax) rates. Texas levies no state or local income tax, so no state calculation applies. Relocation comparisons use simplified, single-bracket-set estimates of other states’ income tax and exclude property/sales tax and cost-of-living differences. This tool provides estimates for planning purposes only and is not tax, legal, or financial advice.