Employee Cost: California vs Texas (2026)
Side-by-side comparison of employer costs, payroll taxes, SUTA rates, and workers' comp.
At a $60,000 salary
Texas saves $457/employee/year
$65,794 in California vs $65,337 in Texas
California
$65,794
1.1x salary
Texas
$65,337
1.09x salary
Cost Breakdown Comparison
Based on $60,000 annual salary
| Cost Component | CA | TX | Diff |
|---|---|---|---|
| Base Salary | $60,000 | $60,000 | — |
| Social Security (6.2%) | $3,720 | $3,720 | — |
| Medicare (1.45%) | $870 | $870 | — |
| FUTA (0.6%) | $42 | $42 | — |
| SUTA (State Unemployment) | $238 | $135 | +$103 |
| Workers' Compensation | $924 | $570 | +$354 |
| Total Employer Cost | $65,794 | $65,337 | +$457 |
Tax Rate Comparison
| Rate | California | Texas |
|---|---|---|
| SUTA Rate Range | 1.5% – 6.2% | 0.31% – 6.31% |
| SUTA Typical Rate | 3.4% | 1.5% |
| SUTA Wage Base | $7,000 | $9,000 |
| Workers' Comp Rate | 1.54% | 0.95% |
| State Income Tax | Yes | No |
| Disability Insurance | 0.0% | Not required |
What This Means for Employers
For a business hiring at a $60,000 salary, choosing Texas over California saves $457 per employee per year in employer-side payroll costs alone. For a team of 10, that's $4,570 annually.
The biggest difference comes from workers' compensation rates — California charges 1.54% vs Texas's 0.95%. Note that federal taxes (Social Security, Medicare, FUTA) are identical in both states.
These numbers reflect employer-side costs only and don't include benefits, overhead, or the employee's own tax burden. Use the interactive Employee Cost Calculator to model different salary levels and benefits packages.
Explore Each State
Cost Comparison at Different Salary Levels
How the gap changes from $30K to $150K
| Salary | CA Total | TX Total | Difference |
|---|---|---|---|
| $30,000 | $33,037 | $32,757 | +$280 |
| $40,000 | $43,956 | $43,617 | +$339 |
| $50,000 | $54,875 | $54,477 | +$398 |
| $60,000 | $65,794 | $65,337 | +$457 |
| $75,000 | $82,173 | $81,627 | +$546 |
| $100,000 | $109,470 | $108,777 | +$693 |
| $125,000 | $136,768 | $135,927 | +$841 |
| $150,000 | $164,065 | $163,077 | +$988 |
Click any amount to see the full cost breakdown for that salary and state. Amounts shown from the perspective of CA.
More State Comparisons
More Free Calculators
Break-Even Calculator
Find how many units to sell to cover costs
Markup & Margin
Convert between markup and margin percentages
Startup Cost Estimator
Estimate one-time and recurring startup costs
Loan Comparison
Compare loan options side by side
Profit Margin Calculator
Calculate gross, operating, and net margins
Employee Cost Calculator
Find the true cost of hiring an employee
Payroll Tax Calculator
Estimate employer payroll taxes by state
Get Free Business Tips
Join small business owners getting weekly financial tips and calculator updates. No spam, unsubscribe anytime.
We respect your privacy. Unsubscribe with one click.