Take-Home Pay in Texas: What No State Income Tax Is Actually Worth

A single filer earning $85,000 in Texas takes home $68,628.

There is no arrangement, no deduction, and no state in the country that produces a higher figure on that salary. Texas takes nothing, so the only deductions are federal — and federal is identical everywhere.

The interesting question is not what Texas takes. It is what that zero is actually worth, and what Texas charges instead.

A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; state figures come from this site's own sourced 50-state dataset. Every dollar figure is computed by the same engine the site's calculators use, on a single filer taking the federal standard deduction with no dependents or pre-tax deferrals unless stated. Property tax and sales tax are discussed qualitatively — this site's property tax data is county-level and lives in the Mortgage category rather than here.

1. What Texas takes: nothing

Texas is one of nine states with no individual income tax. The others are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington and Wyoming.

For a paycheck, that means the deduction list is short:

Across incomes, for a single filer:

Every one of those take-home figures is identical to Florida's, Nevada's, and the other six. On this measure the nine no-tax states are perfectly interchangeable — if you are weighing offers in Dallas and Miami, the state income tax question is settled and you can stop thinking about it.

2. What the zero is actually worth

The saving is not a fixed amount — it is whatever the state you are comparing against would have taken.

At $85,000, against a selection:

Two things worth noting.

California is not the comparison people expect. At $85,000 California takes $3,660 — mid-table, and less than Illinois, Minnesota, Virginia or New York. California's reputation comes from its 12.3% top rate, which applies to income far above this level. Comparing states by their top marginal rate tells you about high earners and very little about everyone else.

Against the low-tax states the advantage is modest. Texas beats North Dakota by $377 a year on this salary — real, and small enough that almost anything else in a relocation decision outweighs it.

The advantage grows with income

Because most state income taxes are graduated, the gap widens as you earn more:

At $175,000, Texas is keeping a Californian's $12,030 and an Oregonian's $15,280. That is the level at which the income tax line genuinely can move a relocation decision rather than merely appearing in it.

3. Why Texas can be confident the zero stays

Most states could impose or repeal an income tax with ordinary legislation. Texas made it substantially harder.

A 2019 constitutional amendment requires a two-thirds vote of each legislative chamber and then approval by a statewide majority before an individual income tax could be imposed. That is a far higher bar than passing a normal bill, and it converts "Texas has no income tax" from a policy position into something closer to a structural feature.

For anyone weighing a long-horizon decision — a career move, a house purchase, a retirement plan — that constitutional layer is worth knowing. It does not make the zero permanent, but it means changing it requires a supermajority and a referendum rather than a single legislative session.

4. There is no local layer either

This distinguishes Texas from several other low-income-tax states, and it matters more than it sounds.

Ohio's 2.75% state rate looks excellent until you add municipal income taxes of 2% to 2.5%. Pennsylvania's flat 3.07% sits alongside local earned income taxes. Maryland's counties levy their own. Michigan, Indiana, Kentucky, Missouri, New York, Iowa, Delaware, Alabama and Oregon all permit some municipal income tax.

Texas has no such layer. There is no city income tax, no county income tax, and no school district income tax on wages. The zero on your pay stub is the complete answer for income tax, which is not true in twelve other states.

That is why a Texas figure needs no asterisk while an Ohio or Pennsylvania figure does.

5. What Texas charges instead

No state runs on nothing. Texas raises revenue through property tax and sales tax, and both fall differently from an income tax.

Property tax is the big one. Texas has no state property tax, but local property taxes — levied by counties, cities, school districts and special districts — are among the highest effective rates in the country. School district taxes are typically the largest single component.

The practical consequence: a homeowner in Texas is paying a substantial annual bill that an income-tax state's homeowner may not be. For someone buying a house, the property tax line can consume a meaningful share of the income tax saving, and on an expensive house it can exceed it entirely. Renters bear it indirectly through rent rather than directly.

Texas does offer a homestead exemption reducing the taxable value of a primary residence, along with additional exemptions for older and disabled homeowners, which softens this for owner-occupiers.

Sales tax is the other. Texas levies a state sales tax with local add-ons on top, producing combined rates that sit among the higher ones nationally. Sales tax is regressive — it takes a larger share of a small income than a large one — so a household spending most of what it earns may find more of the income tax saving returned at the till than a high earner does.

What this means for the comparison

The honest version of "does Texas save me money" is:

Income tax saved − property tax paid above what you would pay elsewhere − sales tax paid above what you would pay elsewhere

For a high-earning renter, the answer is strongly positive: they capture the full income tax saving and bear the property tax only indirectly.

For a modest-earning homeowner with an expensive house, it can genuinely be negative. That is not a common framing and it is arithmetically real.

For most people it is positive but smaller than the headline income tax figure suggests.

6. The federal share is the larger one

It is worth keeping the scale straight. On $85,000 in Texas:

Nineteen percent, all federal. Texas can do nothing about any of it — no state can — and it is more than double what even the most expensive state charges in income tax at this salary.

This is worth remembering when comparing offers. Moving from Oregon to Texas saves $6,864 of state tax; it does not touch the $16,373 of federal tax and FICA, which is the same in both.

And FICA still starts at the first dollar

One consequence people find surprising: someone in Texas earning $12,000 pays no federal income tax — their taxable income is zero after the $16,100 standard deduction — and still pays $918 in Social Security and Medicare.

FICA is charged on gross pay and is not reduced by the standard deduction, by a state having no income tax, or by anything else. In a no-income-tax state it is the only tax a low earner pays, and it is not nothing.

7. What you can still control

With no state layer to optimise, the levers in Texas are federal.

Pre-tax deferrals still work federally. A traditional 401(k) contribution reduces federal taxable income at your marginal rate — 22% for our $85,000 earner. In a state with an income tax you would also save the state's rate on top; in Texas the federal saving is the whole benefit, which makes deferral slightly less valuable in Texas than in Oregon. That is a genuine and rarely-mentioned corollary of living somewhere with no income tax.

HSA contributions save more than 401(k) contributions. Made through payroll under a cafeteria plan, they reduce federal taxable income and FICA wages. That FICA reduction is worth 7.65% and a 401(k) deferral does not touch it. In a no-income-tax state, where the state saving is zero either way, the HSA's FICA advantage is a larger share of the total benefit than elsewhere.

Your W-4 controls timing, not amount. A large annual refund means you over-withheld and lent the Treasury money at zero interest. Adjusting the W-4 moves it into your paychecks without changing your annual liability.

8. Moving to or from Texas

Compare the whole picture, not the income tax line. Property tax and housing cost are the two that most often reverse an apparent Texas advantage. Run the housing numbers for the specific place you are considering rather than the state average.

The advantage scales with income. At $45,000 against California it is $783 a year. At $175,000 it is $12,030. If you are early in a career the income tax difference is a minor input; if you are a high earner it is a substantial one.

Part-year residency has rules. If you move mid-year, your former state will generally tax the income you earned while resident there. Moving to Texas in July does not make the whole year tax-free, and states with an income tax are attentive to residency claims — particularly for high earners leaving.

Renting captures more of the benefit than owning. Not a reason to rent indefinitely, but worth knowing in the first year or two: the income tax saving arrives immediately and the property tax bill arrives with the house.

9. Texas against the other eight no-tax states

Since all nine produce the identical $68,628, the income tax line cannot distinguish them. What separates them is entirely what they charge instead, and the substitutes are genuinely different.

Texas and New Hampshire lean hardest on property tax. Both are known for high effective property rates. New Hampshire is the extreme case — it has neither an income tax nor a general sales tax, so property tax carries almost the entire load.

Washington, Tennessee and Nevada lean on sales tax. All three carry combined state and local sales tax rates among the highest in the country. That falls hardest on households spending most of what they earn, and lightest on high earners who save a large share.

Alaska and Wyoming lean on severance taxes. Both raise substantial revenue from oil, gas and mineral extraction. This is a function of geology rather than policy design, and it is why both can avoid an income tax without an unusual burden landing anywhere else. Alaska is unusual in the other direction too, permitting local sales taxes while having no state one.

Florida leans on sales tax and tourism. A large visitor economy means a meaningful share of sales tax revenue is paid by people who do not live there, which is a genuine structural advantage no landlocked state can copy.

South Dakota leans on sales tax with a broad base.

The practical point: choosing between no-income-tax states is not a tax decision on the paycheck, because they are identical there. It is a decision about property tax if you will own, sales tax if you spend most of what you earn, and everything that is not tax at all.

10. Working remotely for an out-of-state employer

A situation that has become far more common and is frequently misunderstood.

Living in Texas and working remotely for a company headquartered elsewhere generally means no state income tax, because state income tax follows where the work is performed rather than where the employer is incorporated. If you sit in Austin, you are working in Texas.

Two complications worth knowing.

A handful of states apply a "convenience of the employer" rule. Under it, a nonresident working remotely for an in-state employer can be treated as working in the employer's state — and therefore taxed there — unless the remote arrangement exists for the employer's necessity rather than the employee's convenience. New York is the best-known example. If your employer is in one of those states and you work remotely from Texas by choice, you may owe tax there despite never setting foot in the state.

Travelling to the employer's state creates days worked there. Several days a month in an income-tax state can create a nonresident filing obligation, with thresholds that vary and are sometimes very low. Employers with multi-state payroll usually track this; smaller ones frequently do not.

This is one of the few paycheck questions where getting professional advice is genuinely worth it, because the answer depends on your employer's state rather than yours, and the cost of getting it wrong compounds across years.

11. Whether the move is actually worth it

If you are weighing a relocation, the income tax saving is one line in a comparison that has several.

What you gain: the state income tax you would have paid, growing with income — $3,660 a year against California at $85,000, $12,030 at $175,000.

What you may lose: the difference in housing cost, the difference in property tax if you buy, the difference in sales tax on what you spend, and the cost of the move itself.

The check worth running: take the annual income tax saving and compare it against the annual property tax on the house you would actually buy, less the property tax on the house you would have bought where you are. If the second number is larger, the move is not paying for itself on tax, whatever the headline suggests.

For a renter the calculation is simpler and usually favourable, because the property tax reaches you only through rent and the income tax saving is immediate and complete.

None of which is an argument against moving. It is an argument for putting the actual numbers in, since the income tax line is the most visible part of the trade and rarely the largest.

Frequently asked questions

Does Texas have a state income tax? No. Texas is one of nine states with no individual income tax, and a 2019 constitutional amendment requires a two-thirds legislative vote plus statewide approval to impose one — a substantially higher bar than ordinary legislation.

What is take-home pay on $85,000 in Texas? $68,628 for a single filer taking the standard deduction, after $9,870 of federal income tax and $6,503 of FICA. That is the highest take-home available in any state on that salary.

How much does no income tax actually save me? Whatever the state you are comparing against would have taken. At $85,000: $6,864 against Oregon, $3,993 against New York, $3,660 against California, $1,621 against Ohio. At $175,000 the Oregon comparison grows to $15,280.

Are there city or county income taxes in Texas? No. Unlike Ohio, Pennsylvania, Maryland and nine other states, Texas has no municipal, county or school district income tax on wages. The zero is complete.

Is Texas actually cheaper overall? On the income tax line, unambiguously. Overall it depends on your housing. Texas has among the highest effective property tax rates in the country and a high combined sales tax, so a modest-earning homeowner can see much of the saving returned, while a high-earning renter captures nearly all of it.

Do I still pay Social Security and Medicare in Texas? Yes. FICA is federal and applies identically in all fifty states, charged on gross pay from the first dollar. Someone earning $12,000 in Texas pays no federal income tax and still pays $918 in FICA.

Is a 401(k) contribution worth less in Texas? Slightly, yes — you save your federal marginal rate but no state rate, because there is none. The same deferral in Oregon saves the federal rate plus Oregon's. An HSA contribution is proportionally more attractive in Texas because its FICA saving does not depend on a state tax existing.

If I move to Texas mid-year, is my whole year tax-free? No. Your former state will generally tax income earned while you were resident there, apportioned. States with an income tax pay attention to residency claims, particularly for high earners.

What to do next

The Texas figure is simple; the useful work is comparing it against the state you are actually weighing it against, including housing.

• Texas take-home pay calculator — your salary, with every federal deduction shown separately.
• Your Paycheck in the USA in 2026 — all fifty states on one salary, including the full comparison table.
• Texas mortgage payment calculator — where the property tax side of the trade shows up.
• 50/30/20 budget calculator — what to do with the take-home figure.
• Salary calculators by state — all fifty states.

Every figure on this site is sourced and dated. How we source every number.

Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer taking the federal standard deduction with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; state figures from this site's sourced 50-state dataset. Property tax and sales tax are discussed qualitatively rather than computed; property tax data on this site is county-level and lives in the Mortgage category. This is general education and not tax advice; for your own situation consult a licensed tax professional.