How Much Does It Cost to Hire an Employee in Texas? (2026)
State-specific payroll taxes, workers' comp, and total employer costs in Texas.
Hiring a $60,000/year employee in Texas costs employers approximately $65,337 total in 2026, including $5,337 in mandatory payroll taxes and workers' comp. That's a 1.09x multiplier on base salary.
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Total Cost at $60K Salary
$65,337
Cost multiplier: 1.09x
SUTA Rate (Mid)
1.5%
Wage base: $9,000
Workers' Comp Rate
0.95%
No state income tax
Key Insight
For a $60,000 salary in Texas, employers pay $5,337 in mandatory taxes — a 1.09x cost multiplier. Texas's SUTA rate (1.5%) is below the national average of 1.70%, and there is no state income tax — a take-home pay advantage for employees.
Model your specific hire
Use our interactive calculator pre-loaded with Texas's tax rates. Adjust salary, benefits, and overhead to get your true cost.
Texas Employer Tax Details
State-specific payroll obligations for employers
| SUTA Rate Range | 0.32% – 6.31% |
| SUTA New Employer Rate (typical) | 1.5% — No change from 2025 |
| SUTA Wage Base | $9,000 |
| Workers' Compensation (avg) | 0.95% of payroll ↓ 0.02% from 2025 |
| State Income Tax | No |
2026 Rate Changes in Texas
- — SUTA rate unchanged at 1.5% from 2025 to 2026.
- ↓ Workers' comp rate decreased from 0.97% (2025) to 0.95% (2026) — saving approximately $12 per $60K employee per year.
Rate changes reflect Texas #{TaxConstants::TAX_YEAR} announcements vs. 2025 baseline. Workers' comp rates are industry averages and vary by classification code.
Example Employer Costs in Texas
Mandatory employer taxes only (no benefits or overhead)
| Component | $40,000 Salary | $60,000 Salary | $80,000 Salary |
|---|---|---|---|
| Social Security (6.2%) | $2,480 | $3,720 | $4,960 |
| Medicare (1.45%) | $580 | $870 | $1,160 |
| FUTA | $42 | $42 | $42 |
| SUTA (TX) | $135 | $135 | $135 |
| Workers' Comp | $380 | $570 | $760 |
| Total Employer Taxes | $3,617 | $5,337 | $7,057 |
| Total Cost (salary + taxes) | $43,617 (1.09x) | $65,337 (1.09x) | $87,057 (1.09x) |
These estimates include mandatory employer payroll taxes only. Add benefits ($7K-$17K) and overhead (~10% of salary) for full cost.
Tax rates sourced from IRS Publication 15, SSA COLA notices, and Texas Department of Labor. Social Security tax is 6.2% of wages up to $184,500. Medicare is 1.45% with no wage cap. FUTA is 0.6% on the first $7,000 after credit.
How Texas Compares
Texas's typical SUTA rate of 1.5% is below the national average of ~1.70%.
Workers' compensation at 0.95% of payroll is below the national average of ~1.20%. As one of the states with no state income tax, employees in Texas keep more of their paycheck, which can be a hiring advantage without additional employer cost.
Texas Employer Environment
Below-average employer costs- No state income tax — employees keep more of their paycheck, a recruiting advantage
- SUTA rate 1.5% (wage base $9,000) — in line with national average
- Workers' comp rate 0.95% — near national average, varies by industry classification
Texas's overall employer tax burden is broadly in line with the national average. Review SUTA and workers' comp rates relative to your industry classification for a more precise picture.
Texas Employment Profile
Texas has no state income tax, a minimal $9,000 SUTA wage base, and no paid family leave or disability insurance mandates — a primary reason it consistently ranks among the lowest employer-cost states.
energy & petrochemicals, technology (Austin/Dallas), financial services
Texas has absorbed massive corporate relocations from California (Tesla, Oracle, HP Enterprise); in Austin especially, California-level compensation expectations have followed these moves.
Cost at Different Salary Levels in Texas
Total employer cost including all mandatory payroll taxes
Compare Texas With
Employee Costs in Other States
Hiring Cost by Industry in Texas
Workers' comp rates vary significantly by industry — restaurant and construction workers cost far more to insure than office staff.
Average Wages by Occupation in Texas
BLS OEWS 2024Median annual wages from the Bureau of Labor Statistics — use these as your baseline salary when estimating total hiring cost.
| Occupation Group | Median Annual | Employed |
|---|---|---|
| Management | $113,000 | 1,204,540 |
| Computer and Mathematical | $103,990 | 496,000 |
| Architecture and Engineering | $94,760 | 235,220 |
| Legal | $93,460 | 96,460 |
| Healthcare Practitioners and Technical | $79,510 | 777,490 |
| Business and Financial Operations | $77,620 | 859,590 |
| Life, Physical, and Social Science | $73,190 | 108,360 |
| Educational Instruction and Library | $59,950 | 827,110 |
States With Similar Hiring Costs
These states have SUTA rates close to Texas's 1.5% — good for cost benchmarking.
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Simplify Payroll in Texas
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