Payroll and Benefits Guide United States – Texas
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 0.25% – 6.25% | State Unemployment Insurance (SUI), applied on salary up to 9,000 USD annually. |
| 2.70% | State Unemployment Insurance – New Employer, applied on salary up to 9,000 USD annually. |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 0.60% – 6.00% | Federal Unemployment Tax Act (FUTA), applied on salary up to 7,000 USD per year. Employers who pay their state unemployment tax in full and on time are eligible for a 5.4% tax credit, reducing the FUTA rate to 0.6%. |
| 11.18%- 22.58% | Total Employment Cost |
| Employee Payroll Contributions | |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 7.65%-8.55% | Total Employee Cost |
| State Employee Income Tax | |
| No State income tax in Texas | |
| Federal Employee Income Tax | Annual |
| Federal Tax – Singles | |
| 10.00% | Up to 11,925 USD |
| 12.00% | 11,925 – 48,475 USD |
| 22.00% | 448,475 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,525 USD |
| 35.00% | 250,525 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Federal Tax – Married, filing jointly | |
| 0.00% | Up to 23,850 USD |
| 12.00% | 23,850 – 96,950 USD |
| 22.00% | 96,950 – 206,700 USD |
| 24.00% | 206,700 – 394,600 USD |
| 32.00% | 394,600 – 501,050 USD |
| 35.00% | 501,050 – 751,600 USD |
| 37.00% | Above 751,600 USD |
| Federal Tax – Heads of Household | |
| 10.00% | Up to 17,000 USD |
| 12.00% | 17,000 – 64,850 USD |
| 22.00% | 64,850 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,500 USD |
| 35.00% | 250,500 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Standard Deduction and Personal Exemption | |
| 15,000 USD | Single |
| 30,000 USD | Married Filing Jointly |
| 22,500 USD | Head of Household |
Minimum Wage
General
The minimum wage in Texas is the same as the federal minimum wage which is 7.25 USD per hour.
There are also other minimum wage requirements:
- Youth minimum wage: 4.25 USD per hour
- Minimum cash wage: 2.13 USD per hour
- Maximum tip credit: 5.12 USD per hour
The Federal minimum wage rate is 7.25 USD per hour.
Payroll
Payroll Cycle
In Texas, employees are paid monthly or semi-monthly.
13th Salary
There are no statutory laws on 13th salaries.
Working Hours
General
The workweek is a maximum of 40 hours per week or eight hours per day.
Overtime
Texas adheres to the Fair Labor Standards Act (FLSA) and splits employees into two categories regarding minimum wage and overtime payments: Exempt and Non-exempt.
FLSA exemptions depend on the amount of the employee’s salary and their job category.
Exempt employees do not receive overtime or compensation as outlined in FLSA. Exempt employees include contract workers, state employees, and administrative staff.
An exempt worker can qualify for state compensatory time in lieu of compensation, whereas the standard federal position is that compensatory time payments do not apply.
Non-exempt employees must be paid on a time and a half of their hourly wage schedule for overtime as specified in the employment contract.
For example, public safety workers have a 240-hour compensatory time limit before it becomes mandatory to receive payment.
Based on the exemption criteria above, overtime (when applicable) is paid at the rate of 150% of the regular pay when an employee works more than 40 hours in a working week.
Similarly, if an employee is scheduled to work on weekends or rest days, no additional payment is required. However, should an employer request an employee to work in exceptional circumstances on these days, then overtime will be payable at 150% 0f the regular salary rate for the extra hours worked.
Leave
Annual Leave (vacation)
Texas does not have any state laws that govern the amount and payment of vacation time, however, it is common for employers to decide whether to offer paid or unpaid vacation leave.
This must comply with employment law and must be stipulated in the collective bargaining agreements.
Public Holidays
Public holidays are not mandatory paid days off, but employers commonly allow workers to take federal holidays as paid days off.
Some companies might also agree to allow workers to take off state holidays; workers can find specific state holiday dates from their local government.
Usually when an agreed public holiday falls on a weekend, a day off in lieu is given on the Friday before or the Monday after the holiday.
| Date | Day | Holiday | Note |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| January 19, 2026 | Monday | Martin Luther King, Jr. Day | |
| January 19, 2026 | Monday | Confederate Heroes’ Day* | |
| February 16, 2026 | Monday | Presidents’ Day | |
| March 2, 2026 | Monday | Texas Independence Day* | |
| March 31, 2026 | Tuesday | César Chávez Day** | |
| April 3, 2026 | Friday | Good Friday** | |
| April 21, 2026 | Tuesday | San Jacinto Day* | |
| May 25, 2026 | Monday | Memorial Day | |
| June 19, 2026 | Friday | Emancipation Day (Juneteenth)* | |
| July 3, 2026 | Friday | Independence Day (Observed) | |
| August 27, 2026 | Thursday | Lyndon B. Johnson (LBJ) Day* | |
| September 7, 2026 | Monday | Labor Day | |
| November 11, 2026 | Wednesday | Veterans Day | |
| November 26, 2026 | Thursday | Thanksgiving Day | |
| November 27, 2026 | Friday | Day After Thanksgiving | |
| December 24, 2026 | Thursday | Christmas Eve | |
| December 25, 2026 | Friday | Christmas Day | |
| December 26, 2026 | Saturday | Day After Christmas |
Sick Days
Sick leave falls under the Family and Medical Leave Act (FMLA) which provides leave for an employee with a serious health condition that makes them unable to perform the essential functions of their job.
It is common for an employer to follow the FMLA which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).
Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
Maternity Leave
Maternity leave falls under the FMLA (see sick leave) which allows a mother:
- 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
In addition to the Family and Medical Leave Act (FMLA) and the Pregnancy Discrimination Act, Texas has the following additional law regarding Maternity and Paternity Leave (Pregnancy Disability Leave), Texas’s law against discrimination.
This law requires employers with six or more employees to provide employees with leave due to disabilities related to pregnancy or childbirth for the duration of such disability (pregnancy and childbirth is treated as any other type of temporary disability for all employment-related purposes, including benefits such as receipt of fringe benefits).
Employers must reinstate employees to their previous or comparable position upon their return.
Paternity Leave
Paternity leave falls under the FMLA (see sick leave), which allows fathers:
- Twelve working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
The Texas Law Against Discrimination applies (see maternity leave).
Parental Leave
Parental leave falls under the FMLA (see sick leave), which allows for:
- Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- Any qualifying necessity arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on covered active duty.
Other Leave
Leave for the care of an employee’s spouse, child, or parent who has a severe health condition falls under the FMLA (see sick leave).
Alternatively, an employee may take 26 working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
Other leave under Texas law includes:
- Jury Duty: Texas law states that all employers must provide their full-time employees job-protected but unpaid time off from work to perform their duty as jurors. Employees must provide a copy of the jury summons to the employer as evidence of requirement.
- Voting Leave: Texas law requires all employers to grant their employees who are registered to vote up to two hours of paid leave to vote in any municipal, county, state, federal primary, or general election. Employees must provide reasonable notice to their employers to take time off to vote.
- Employees may request unpaid leave to attend a state or local political convention.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated as at will.
This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a just cause termination clause which mandates that the employer may only terminate the employee for cause and lists the permissible grounds.
In such cases, the parties negotiate the foundations for a just cause termination.
Notice Period
In Texas, most employees are employed at will, and either party can terminate the employment relationship without notice. An employer’s policy or employee contract governs whether earned or unused vacation is paid on separation.
Still, employers will generally pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation.
There is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.
In mass dismissal cases, the Worker Adjustment and Retraining Notification Act (WARN) must be followed, and employers must give 60 days’ notice to impacted employees.
Severance Pay
Except as otherwise provided in an employment contract or collective bargaining agreement, employers are not required to make severance payments to terminated employees.
Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed upon by both parties. Many employers choose to offer severance pay based on the employee’s length of employment.
Probation Period
No legal provision governs a formal trial or probation period. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.
Minimal Statutory Termination Costs
Some states require PTO balances to be paid out during termination, also any bonuses or commissions that were promised in the employment contract
Immigration
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.
An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement).
To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request; the types of visas include:
- H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
- 0 – for people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – Members of certain immigrant groups.
- E-5 – Immigrant investors in US companies (substantial investment)
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States.
The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorized to work in the United States.
VAT
General
Texas has a State sales tax rate of 6.25%. Additionally, local jurisdictions can add a Local sales tax of up to 2%.
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Payroll and Benefits Guide
in United States – Texas
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Note |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| January 19, 2026 | Monday | Martin Luther King, Jr. Day | |
| January 19, 2026 | Monday | Confederate Heroes’ Day* | |
| February 16, 2026 | Monday | Presidents’ Day | |
| March 2, 2026 | Monday | Texas Independence Day* | |
| March 31, 2026 | Tuesday | César Chávez Day** | |
| April 3, 2026 | Friday | Good Friday** | |
| April 21, 2026 | Tuesday | San Jacinto Day* | |
| May 25, 2026 | Monday | Memorial Day | |
| June 19, 2026 | Friday | Emancipation Day (Juneteenth)* | |
| July 3, 2026 | Friday | Independence Day (Observed) | |
| August 27, 2026 | Thursday | Lyndon B. Johnson (LBJ) Day* | |
| September 7, 2026 | Monday | Labor Day | |
| November 11, 2026 | Wednesday | Veterans Day | |
| November 26, 2026 | Thursday | Thanksgiving Day | |
| November 27, 2026 | Friday | Day After Thanksgiving | |
| December 24, 2026 | Thursday | Christmas Eve | |
| December 25, 2026 | Friday | Christmas Day | |
| December 26, 2026 | Saturday | Day After Christmas |
Questions & Answers