Texas Take Home Pay Calculator 2026

Welcome to Texas, where the state income tax rate is a beautiful 0%. For professionals, entrepreneurs, and families relocating from high-tax states, Texas offers an immediate and substantial boost to disposable income. The "Texas Miracle" isn't just about job growth; it's about keeping more of the money you earn.

Whether you are working in the energy corridor of Houston, the tech silicon hills of Austin, or the financial centers of Dallas, your paycheck in Texas is free from state-level levies. This simple fact makes Texas one of the most financially competitive states in the nation for employees.

However, "tax-free" doesn't mean "cost-free." Texas has a unique way of funding its government services, primarily through property and sales taxes. Understanding this trade-off is key to holistic financial planning in the Lone Star State.

While you save on income tax, your wallet will feel the pinch elsewhere:

• Property Taxes: Texas has some of the highest effective property tax rates in the country, often exceeding 2% of a home's value annually in many counties. If you buy a $500,000 house, expect to pay $10,000+ a year in property taxes.
• Sales Tax: The state sales tax is 6.25%, but local jurisdictions can add up to 2%, bringing the total to 8.25% in most major cities.
• Housing: While prices have risen in Austin and Dallas, Texas housing generally offers more square footage for the money compared to coastal markets.

Let's compare a $150,000 salary in Texas vs. New York:

• In New York: You would pay roughly $8,500 - $10,000 in state (and potentially city) income taxes.
• In Texas: You pay $0.

Over a decade, that is $100,000 in wealth accumulation just from tax savings (assuming investment returns). This is why many companies and workers are migrating to Texas. However, renters often see the high property taxes passed down in the form of higher rent prices.