Texas Employee Cost Calculator
Texas offers extremely low employment costs with no state income tax, federal minimum wage, and competitive SUI rates (0.31%-6.3%). One of the most business-friendly states.
$7.25/hr
2.70%
0.31% -6.30%
$9,000
Enter salary and state, then click Calculate
Ready to run payroll in Texas?
Once you know the true employee cost, the next job is paying people correctly. Full-service payroll software can help with pay runs, tax filings, W-2s, new-hire reporting, and state unemployment details.
Disclosure: some payroll links may be affiliate links, at no extra cost to you.
Key Facts About Hiring in Texas
No state income tax
Federal minimum wage: $7.25/hour
SUI rates: 0.31% to 6.3%
Major business hub
Very business-friendly
2026 Texas Employer Cost Snapshot
Texas is attractive for employers because it has no state income tax and a low SUI wage base, but every liable employer still needs a TWC tax account, quarterly wage reporting, and a current unemployment tax rate notice.
Benefits are modeled at 18% for this example. Use the calculator above to replace this with your actual health insurance, retirement, and PTO assumptions.
The 2026 Texas taxable wage base is $9,000 per employee.
For 2026, Texas assigns a 2.70% entry-level rate to newly liable employers.
Experienced employer rates vary by claims history and the five components in the TWC tax formula.
Texas has no statewide paid leave or state disability insurance program, so benefit costs are mostly employer policy choices.
- Register with the Texas Workforce Commission within 10 days of becoming liable.
- Use the current TWC rate notice instead of assuming the entry-level rate after the first years.
- Track remote employees carefully so unemployment wages are reported to the right state.
- Budget FUTA separately from Texas UI; both apply to separate wage bases.
- For many Texas salaries, state unemployment is capped quickly because the wage base is only $9,000.
- The biggest swing factors are health benefits, retirement match, workers' comp, and whether the role is exempt or overtime eligible.
- Texas pages should push users toward payroll setup and multi-state payroll content because many Texas companies hire remote workers.
Ready to run payroll in Texas?
Once you know the true employee cost, the next job is paying people correctly. Full-service payroll software can help with pay runs, tax filings, W-2s, new-hire reporting, and state unemployment details.
Disclosure: some payroll links may be affiliate links, at no extra cost to you.
Official Texas payroll sources
Frequently Asked Questions - Texas
Calculate Texas Costs by Industry
Workers' compensation rates, turnover, and compliance requirements vary significantly by industry. See industry-specific costs for Texas.
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