Texas Salary Paycheck and Payroll Calculator

Calculating paychecks and need some help? Use Gusto’s salary paycheck calculator to determine withholdings and calculate take-home pay for your salaried employees in Texas.

We’ll do the math for you—all you need to do is enter the applicable information on salary, federal and state W-4s, deductions, and benefits.

The information provided by the Paycheck Calculator provides general information regarding the calculation of taxes on wages for Texas residents only. It is not a substitute for the advice of an accountant or other tax professional. The Paycheck Calculator may not account for every tax or fee that applies to you or your employer at any time. ZenPayroll, Inc., dba Gusto ("Gusto") does not warrant, promise or guarantee that the information in the Paycheck Calculator is accurate or complete, and Gusto expressly disclaims all liability, loss or risk incurred by employers or employees as a direct or indirect consequence of its use. By using the Paycheck Calculator, you waive any rights or claims you may have against Gusto in connection with its use.

What to Know About Texas Paychecks

Payroll taxes can be overwhelming when you’re starting your business. There are federal taxes, state taxes, and even local and city taxes in some locations. 

If you have employees in Texas, here are the federal and state payroll taxes you’ll have to collect and pay. 

Texas payroll taxes

Texas has only one state payroll tax, and it’s paid for by the employer. 

Texas Unemployment Insurance (UI) is paid on the first $9,000 in wages you pay each employee every calendar year. Your tax rate is calculated using several factors and can change each year—the minimum tax rate is 0.31% and the maximum rate is 6.31% in 2022. Check out the Texas Workforce Commission’s website to find your current tax rate.

Federal payroll taxes to include in each paycheck

In addition to the Texas UI tax, here are the federal payroll taxes that all employers must pay or withhold from employees’ earnings. 

Employers and employees both pay:

FICA: The Federal Insurance Contributions Act tax is made up of the Medicare tax and the Social Security tax. In 2022, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $147,000. The Medicare tax rritequires each to contribute 1.45% of all wages. See the IRS webpage for details, like maximum thresholds.

Employers pay:

FUTA: Like the state, the federal government also has an unemployment tax. It’s called FUTA and it’s an annual tax employers pay on the first $7,000 of each employee’s wages. The FUTA rate for 2022 is 6%, but most employers only have to pay 0.6% each year.

Workers’ Compensation

Requirements to obtain Workers’ Compensation vary by state, this table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the workers’ comp audit reports dropdown for more information.

Employees pay:

Federal income tax: The amount withheld is based on the employee’s Form W-4. (Here are instructions on  how to fill out Form W-4.) The amount of tax that you withhold from each employee’s paychecks varies based on their earnings, filing status, and other factors.

Additional Medicare tax: This 0.9% tax applies to employees who make more than a certain income threshold, which varies by filing status. You must withhold this tax from employee wages that exceed $200,000 per year. 

Remember, you’re responsible for sending the taxes you withhold from employees’ earnings to the state and federal governments.

Federal salary threshold

The federal salary threshold is now $684 per week (equivalent to $35,568 per year for a full-year worker). The Department of Labor permits employers to count some bonuses, commissions, and other incentive payments toward meeting the standard salary level (up to 10%). Employees who earn at least $107,432 per year may qualify as “highly compensated.” See this Department of Labor fact sheet for details.

Other Texas paycheck rules to know

Here are a few other essential things to know:

  • Exempt employees must be paid at least once per month. 
  • You need to provide employees with a written earnings statement at the end of each pay period. This can be a pay stub or check voucher, for example. That earnings statement needs to include the employee’s name, their pay rate, and the total number of hours worked. It’ll also need to state their gross pay during the pay period, any deductions made and the purpose, and their net pay. 
  • You need to report new hires to the Texas Attorney General’s office. You must do this within 20 days from the day they start work, or you may owe a penalty. 
  • When you terminate or lay off an employee, you must pay the employee their final paycheck within six calendar days. If the sixth day falls on a weekend or holiday, you can wait until the next workday. However, if an employee voluntarily leaves, there’s no need to make a special paycheck. You can just pay them on the next regularly scheduled pay date.

Rather leave the numbers to someone else? An automated payroll system or an experienced accountant can help you with the payroll process.

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