Texas variant. This is a Texas-specific version of the Payroll Tax Estimator (Flat Rate), using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Payroll Tax Estimator (Flat Rate).
Texas employers owe federal payroll taxes (Social Security, Medicare, FUTA) plus state obligations (state unemployment only - no state income tax withholding).
Payroll tax obligations in Texas
Employers match the 6.2% Social Security and 1.45% Medicare withheld from employees, and pay FUTA (0.6% on the first $7,000 after credits) plus state unemployment insurance.
Texas has no state income tax, so you don't withhold state income tax - but you still pay state unemployment.
About taxes and housing in Texas
Texas has a constitutional ban on a state personal income tax, relying instead on sales and property taxes.
Texas offsets the lack of an income tax with relatively high property taxes near 1.68%, while median home values are around $305,000.
Texas has one of the largest state economies in the nation, led by energy, technology, manufacturing, and trade.
Worked example: employer cost on $75,780
On a $75,780 salary, the employer's FICA match alone is 7.65% = $5,797, before FUTA and Texas unemployment insurance.
Quick reference
- State income tax: No state income tax (constitutional ban)
- State sales tax: 6.25% (plus 1.95% avg local)
- Median home value: $305,000
- Median household income: $75,780
- Effective property tax rate: 1.68%
- Avg auto insurance: $2,018/yr
Frequently Asked Questions
What payroll taxes do Texas employers pay?
Employer FICA match (7.65%), FUTA, state unemployment, and no state income tax withholding.
What is the employer FICA match?
Employers match 6.2% Social Security + 1.45% Medicare = 7.65% of wages.