The average American pays an effective state income tax rate of roughly 4-5% on wages. Texas residents pay 0%. At a $65,000 salary, that difference is approximately $2,600-$3,250 per year, or $217-$271 per month, that stays in your paycheck. The Texas Constitution (Article VIII, Section 24) has prohibited a personal income tax since statehood, and changing it would require a statewide voter referendum.
Texas is one of nine no-income-tax states, alongside Florida, Nevada, Washington, Wyoming, Alaska, South Dakota, Tennessee, and New Hampshire. Workers in Texas are subject to the same federal income tax as everyone else, but the absence of a state layer means the effective total tax burden on wages is substantially lower than in most states. See the Florida Paycheck Calculator for a comparable no-income-tax state.
Texas has no state income tax, no state disability insurance (SDI), and no local income taxes. No Texas city or county charges a wage-based income tax. The only withholding items on a Texas paycheck stub are federal income tax, Social Security, and Medicare.
Withholding is controlled by your federal W-4. Your filing status and any additional withholding elections on the W-4 are the only levers you have. If you earn income through a side business or freelance work in Texas, you also owe self-employment tax (15.3% on net self-employment income). Use the Self-Employment Tax Calculator to estimate that separately.
Single filing status, 2026 federal standard deduction of $14,600, no pre-tax benefit deductions. Federal taxable income is $45,400.
| Deduction | Annual | Monthly |
|---|---|---|
| Gross Salary | $60,000 | $5,000 |
| Federal Income Tax | −$5,210 | −$434 |
| Texas State Tax | $0 (none) | $0 (none) |
| Social Security (6.2%) | −$3,720 | −$310 |
| Medicare (1.45%) | −$870 | −$73 |
| Estimated Take-Home | $50,200 | $4,183 |
Estimates only. Actual withholding may vary based on W-4 elections, pre-tax deductions, and employer-specific items.
Illinois charges a flat 4.95% state income tax on all wage income. At $60,000, an Illinois worker pays approximately $2,850 in state income tax that a Texas worker keeps entirely. The gap grows with income and is permanent as long as both states maintain their current structures.
| Gross Salary | Texas Take-Home | Illinois Take-Home | TX Advantage/Year |
|---|---|---|---|
| $60,000 | $50,200 | $47,350 | +$2,850 |
| $80,000 | $65,100 | $61,140 | +$3,960 |
| $100,000 | $79,200 | $74,370 | +$4,830 |
| $150,000 | $115,500 | $108,195 | +$7,305 |
| $200,000 | $149,700 | $141,150 | +$8,550 |
Single filer, 2026 federal brackets, standard deductions. Illinois figures use 4.95% flat rate minus $2,425 personal exemption. Take-home figures rounded.
Texas property tax rates average 1.60-1.80% of assessed home value, well above the national average of roughly 1.07%. On a $350,000 home in a Dallas suburb, that means $5,600-$6,300 per year in property taxes, compared to about $3,745 at the national average. The income-tax savings and the property-tax premium often roughly offset for homeowners at common salary levels.
Renters are shielded from direct property tax exposure and capture the full benefit of no income tax. Homebuyers moving from California (low property tax around 0.75%) to Texas face the reverse trade: they save on income tax but pay significantly more in property tax. The net benefit depends on home value and income level.
Texas also has no inheritance tax and no estate tax at the state level. For high-net-worth individuals, this compounds the long-term wealth retention advantage. Use the 401(k) Calculator to model how the income tax savings, when invested annually, compound over a 20-30 year career.