The Lone Star State uses the same minimum wage rate required by the federal government, and there are currently no local minimum wage rates for any of its cities or counties.

Texas is one of the few states in the county that doesn't impose an income tax on its residents, but the Texas-based organizations must accommodate the State Unemployment Insurance (SUI) in addition to those required by the federal government.

The below information was last updated June 16, 2023. It is not intended as legal or tax advice.


 

Texas Minimum Wage Rates

Wage Type

Texas Rates

Federal Rates

Minimum Wage

$7.25

$7.25

Tipped Minimum Wage

$2.13

$2.13

Actual Tip Credit

$5.12

$5.12

Wage Type

Texas Rates

Federal Rates

Minimum Wage

$7.25

$7.25

Tipped Minimum Wage

$2.13

$2.13

Actual Tip Credit

$5.12

$5.12

 


 

Texas State Income Tax (SIT) Rates

Texas is one of the few states that doesn't impose or collect a personal income tax.


 

Texas State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements. However, in Texas, any employer with four or fewer employees may not be liable for this tax, so you must contact the state directly to verify your liability.

For employers who are liable, the overall SUI tax rate is based on the sum of five components:

  • General Tax Rate (GTR)
  • Replenishment Tax Rate (RTR)
  • Obligation Assessment Rate (OA)
  • Deficit Tax Rate (DTR)
  • Employment Training Investment Assessment (ETIA)

Texas SUI Tax Details

Taxable Wage Base

$9,000

Employee Subject to Tax

No

Rates for Experienced Employers

0.23% – 6.23%

Rates for New Employers

2.7%

Effective Period

Calendar Year

Voluntary Contributions Allowed

Yes; due by 60th day after date (annual experience rate notice is mailed to employer)

GTR

(three years of chargebacks ÷ three years of taxable wages) × 1.27%

RTR

0.13%

OA

0.0%

DTR

0.0%

ETIA

0.1%

Texas SUI Tax Details

Taxable Wage Base

$9,000

Employee Subject to Tax

No

Rates for Experienced Employers

0.23% – 6.23%

Rates for New Employers

2.7%

Effective Period

Calendar Year

Voluntary Contributions Allowed

Yes; due by 60th day after date (annual experience rate notice is mailed to employer)

GTR

(three years of chargebacks ÷ three years of taxable wages) × 1.27%

RTR

0.13%

OA

0.0%

DTR

0.0%

ETIA

0.1%

 


 

Texas State Disability Insurance (SDI) Rates

SDI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. Texas, however, doesn't require employers to collect an SDI tax, though employers can voluntarily opt to purchase a DI policy to limit legal liability.


 

Miscellaneous Texas Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. Texas currently has no reciprocal agreements with any other states.

Paid Sick Leave (PSL)

The state of Texas doesn’t require employers to collect PSL taxes, nor does the state have a program providing paid sick leave to employees.


 

Texas Employer Registration

The Texas Workforce Commission can help with your state-based employer registration, including best practices, account numbers, and unemployment information.

Registration Details

Texas Workforce Commission

Phone

(512) 463-2731

Online Registration

https://www.twc.texas.gov/businesses/unemployment-tax-registration

Registration Instructions

Account numbers will be issued during online registration or 2-3 weeks via mail.

Employer Self-Service Login

https://apps.twc.state.tx.us/UITAXREG/security/logon.do

Registration Details

Texas Workforce Commission

Phone

(512) 463-2731

Online Registration

https://www.twc.texas.gov/businesses/unemployment-tax-registration

Registration Instructions

Account numbers will be issued during online registration or 2-3 weeks via mail.

Employer Self-Service Login

https://apps.twc.state.tx.us/UITAXREG/security/logon.do

 


 

Additional Texas Payroll Tax Resources

 

This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, Tax Attorney, or Advisor.

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