Free Texas paycheck calculator for hourly and salary employees in 2022

This paycheck withholding calculator can help you estimate the net pay of any employee that works in Texas. Use it to get a clear picture of how overtime, benefits, bonuses, and federal taxes impact each employee’s gross pay. 

Texas paycheck calculation overview

Since Texas does not impose state income taxes, you and your employees can keep more money in your pockets after each paycheck and at the end of the year when you all file income taxes. 

Takeaway: If your employees work in Texas, you are only responsible for withholding federal income taxes from your staff’s paychecks. 

How to calculate your employee’s paycheck 

Inaccurate paychecks just aren’t an option. When you send out paychecks with mistakes or you withhold too much money for taxes, you open yourself up to fines while also drastically lowering employee morale. After all, the more money you take out of each paycheck, the less they have to pay their bills.

To determine your employees’ Texas take-home pay, you will need to enter the relevant information into a Texas wage calculator so it can accurately calculate deductions. You can calculate the amount taken out of any check by following these five simple steps:

1. Enter personal details: Input any employee's first and last name. Then, select the primary state they work in.

2. Payment information: Type in the employee’s payroll schedule, hourly wage or salary, pay type, hours worked (if applicable), and pay date. 

3. Additional pay: Take note of any financial benefits like bonuses or commissions. 

4. Federal tax information: This will include your employee’s filing status, tax allowances, and any additional withholdings. 

5. Download paycheck details: Once you finalize all of the information, you will be able to see your employee’s net vs. gross pay and paycheck deductions.  

Tip: If an employee worked more than 40 hours in a week, do not include that in step 2. Wait and record that information under the “overtime worked” field in the additional pay section. 

If you don’t want to handle these calculations on your own, you can also lean on payroll software or a professional accountant for help. 

How much is taken out for taxes in Texas? 

There is no Texas income tax rate. 

The Lone Star State doesn’t collect state income taxes because the Texas Constitution forbids it. Instead, Texas solely gets the money to maintain its infrastructure through property and sales taxes. 

That means as a Texas business owner—assuming all of your staff carry out the majority of their job within state lines—all you will need to withhold is federal taxes. 

The federal income tax rates for 2022 come in at the following percentages: 10, 12, 22, 24, 32, 35, and 37. Since the IRS sets these tax rates based on the filer’s marital status and income, you may end up withholding different amounts for different employees. 

Federal tax withholdings 

You will determine how much to withhold from each employee’s paycheck based on the information they report on Form W-4 when you hire them. The federal withholding rate varies based on the number of jobs your employee works, marital status and dependents, and other deductions—which all affect your salary after taxes in Texas. 

Regardless of the tax rate they’re responsible for, everyone who works and/or employs staff will need to pay:

FICA taxes: Medicare and social security

Federal income taxes: FUTA and additional Medicare tax

Employers are also responsible for paying a federal unemployment tax (FUTA). If you’re not sure how much to withhold and aren’t ready to hire an accountant, you can also use a tax withholding estimator to determine the amount. 

Where does the money taken out of my paycheck go? 

Depending on how much you earn, the government may take a significant portion of your paychecks. So, what are they using it for? Well, the portion of each paycheck that goes to the federal government is used for funding:

• Healthcare programs: Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP)
• Social Security: Retirement, disability, and survivors’ benefits
• Defense: Military and national security
• Safety net benefits: Unemployment, food stamps, low-income housing, SNAP, head start, WIC, and Federal Pell Grants
• Interest: National debt

Additional deductions on Texas paychecks

Aside from the standard federal deductions, there are other common payroll deductions that you may need to apply if you offer benefits, including any of the following:

• FSA or HSA
• 401(k) contributions
• Health insurance
• Dental insurance
• Vision insurance
• IRA 
• Commuter benefits
• Disability insurance
• Wellness benefits

Note: Non-tax specific deductions aren’t factored into the gross to net paycheck calculator. If you have questions about these deductions, talk to an accountant or payroll specialist. 

Texas payroll laws 

Texas’ payday laws set several requirements that employers must abide by to protect workers’ rights. 

• New hires: You must report all new hires to the Texas Attorney General’s office within 20 days of their first day on the clock.
• Pay stubs: You need to give each employee an earnings statement for every pay period. 
• Non-exempt employees: You must pay hourly employees and other non-exempt staff at least twice each month.
• Overtime: You must pay hourly employees 1.5x their hourly rate for any amount of time they work beyond 40 hours a week.
• Termination: If you let an employee go, you must send them their final paycheck within six calendar days. 
• Resignation: If an employee quits, you should give them their last paycheck on the regularly scheduled payday. 

Make smart payroll and hiring decisions

If you aren't careful, the cost of wages, benefits, and taxes may start to outweigh the company’s profits. Try using a payroll service to keep a close eye on company expenses and an employee cost calculator to determine how much you will have to pay to hire a new team member before you commit. 

QuickBooks Online Payroll & Contractor Payments: Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services, subject to eligibility criteria, credit and application approval. For more information about Intuit Payments Inc.’s money transmission licenses, please visit: 

https://www.intuit.com/legal/licenses/payment-licenses/