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Texas Payroll Services and Regulations

No matter what your business does in Texas, running payroll can get complicated. If you feel overwhelmed by the rules and regulations you need to follow, rest assured that Gusto can handle it for you. Here’s what you need to know before issuing your next paychecks in Texas.

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Key regulations Texas payroll professionals need to know

Texas minimum wage

Texas minimum wage is $7.25 per hour. Employers can count tips and any applicable meal and lodging costs toward minimum wage payments, as long as they follow state guidelines. Tipped employees must receive a base wage of $2.13 per hour.

Texas pay stubs

Texas state law requires that all employees give workers pay stubs detailing the number of hours worked, rate of pay, and amount paid (gross and net). These pay stubs must also include payroll deductions and their purpose and the employee’s and your business’s name and address.

Texas pay periods

In Texas, all exempt employees under the Fair Labor Standards Act (FLSA) must be paid monthly or more frequently. Nonexempt employees must be paid twice per month or more frequently. If you pay employees semi-monthly, each of your semi-monthly pay periods must contain a roughly equivalent number of days. 

As long as you adhere to these guidelines, you can choose any pay dates that work well for your business. If you do not state otherwise, paydays occur the first and 15th of the month. No matter whether you opt to these default dates or set your own, you must post your pay schedule within plain sight in your workspace.

Determining time worked in Texas

Texas follows the national definitions of “workweek” and “hours worked” set by the Department of Labor (DOL). This means that in Texas, a workweek is any seven-day period – it can start on any day of the week and at any time, as long as it encompasses 168 consecutive hours. Likewise, since the DOL states that all hours during which an employee is present at an employer-determined location for work purposes are hours worked, Texas uses this definition as well.

Overtime pay and tracking in Texas

In Texas, nonexempt employees must be paid time and a half for any hours worked beyond 40 hours in a workweek. Exemptions are based on salary and duties.

Texas final wage payment

Under state law, employers must pay all final wages to an employee who has been laid off, fired, dismissed, or involuntarily terminated within six calendar days. If an employee leaves voluntarily, their final pay is due on the next regularly scheduled payday.

Income tax withholding in Texas

Texas does not collect personal income taxes, so when calculating payroll taxes for your employees, you do not need to withhold any money for income taxes. Of course, you will still need to withhold federal income tax.

Texas benefits

Under Texas state law, employers are not legally obligated to offer benefits such as health insurance or workers’ compensation to their employees. However, the federal Patient Protection and Affordable Care Act (ACA) supersedes Texas state law and requires that employers with 50 or more full-time (or equivalent) employees offer health insurance to at least 95% of their workers. Some local agencies (San Antonio, Dallas, and Austin) require employers to provide sive leave to their employees.

Despite the lack of Texas benefits laws, Texan employers are required to provide at least two hours of paid time off for employers who are voting. Employers in Texas also can’t penalize employees for taking time off for jury duty, though they do not need to pay employees for this time off.

Why is Gusto a great payroll provider in Texas?

Gusto offers payroll solutions, HR tools, and benefits administration, all rolled into one easy-to-use platform. Our payroll software works in all 50 states, so whether you have a single office in Dallas or manage locations in several states from your Austin headquarters, our software can help you meet your obligations with ease.

Gusto Customer in Texas[Gusto] makes it much easier to add benefits for our company without having to sift through providers and manage it in another web portal.
CEO of Bohemian Innovation

1. Unlimited payroll

Some platforms limit the number of times you can run payroll, but not Gusto—we let you run payroll as many times as you need. Through Gusto, you can set up multiple pay rates and schedules to keep your contractors, full-time employees, hourly workers, and salaried staff happy.

2. Simple free structure

Choose from our four plans, each designed to support your business where it is right now. Our fee structure is straightforward, too. As your business grows, you pay just an additional $6 or $12 per employee.

3. Hassle-free tax filing and payment

At Gusto, our experts help ensure that you’re following local, state, and federal regulations. The payroll tax requirements a Texas business must pay can be completed from within our user-friendly dashboard. Federal, state, and local taxes are withheld automatically, and we send those payments on your behalf to the proper authorities. Many tax forms can be e-signed and e-filed within the platform, simplifying and streamlining the payroll process from A to Z.

4. Onboard new employees with Gusto

Gusto lets you e-sign and e-file many forms, letters, and information. From issuing hiring letters to requesting bank account information, new hires can be onboarded, reported, and managed quickly and easily.

5. Offer benefits for your team

Give your team benefits through Gusto. Offer health insurance from more than 3,500 options, 401(k) programs, flexible spending accounts, and 529 college savings plans—all through Gusto.

We also offer Gusto Cashout™, which lets your employees cover unexpected expenses between payrolls. At no cost to you or your employees, Gusto Cashout allows for pay advancement without needing to make special adjustments; the whole process is managed automatically through the Gusto dashboard.

Frequently asked questions about payroll in Texas

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