How Is My Paycheck Taxed in Texas?

By Team SalaryCalculate · 7/23/2025

Texas doesn’t have a state income tax—so why does your paycheck still feel smaller than expected? The truth is, even without state tax, federal deductions can still take a big bite. Most Texans see between 15% and 30% of their gross pay withheld depending on their income, benefits, and filing status. The biggest deductions come from federal income tax and FICA taxes (Social Security and Medicare). If you’ve ever asked yourself, “Where did my money go?”—you’re not alone. And you’re not crazy. Texas might be tax-friendly, but it’s not tax-free.

In this article, we’ll walk through how your paycheck is actually taxed in Texas. We’ll break down how the IRS decides how much to withhold, what FICA is (and why you can’t avoid it), and how things like bonuses, retirement contributions, and benefits affect your take-home pay. We’ll also tackle common questions like

why your Texas paycheck might be smaller than expected

and what you can do to take home more. Let’s dig in.

What Gets Taken Out of a Texas Paycheck?

Even though there’s no state income tax in Texas, there are still several mandatory federal deductions:

Deduction	Who Takes It	Rate (2025)
Federal Income Tax	IRS	Varies by income + Form W-4 settings
Social Security (FICA)	IRS (via employer)	6.2% on first $168,600 of wages
Medicare (FICA)	IRS (via employer)	1.45% (plus 0.9% if over $200k)
Other Withholding	Employer/Gov	401(k), health insurance, etc.

How Federal Income Tax Is Calculated

Your employer uses your Form W-4 and the IRS withholding tables to figure out how much federal income tax to withhold each paycheck.

Here’s how it works:

1. Start with your gross pay.
2. Adjust for pre-tax benefits like health insurance or retirement contributions.
3. Look at your W-4: The more dependents or deductions you claim, the less gets withheld.
4. Use IRS tables to match your pay frequency, marital status, and income bracket.

Let’s say you make $80,000 a year and claim no dependents. You’re likely to have about $10,000 withheld for federal taxes in 2025—about $833/month. But if you increase your retirement contributions, that taxable income goes down and so does your withholding.

What Is FICA and Why Can’t I Opt Out?

FICA stands for Federal Insurance Contributions Act. It’s not optional, and it covers:

- Social Security: 6.2% of wages up to $168,600
- Medicare: 1.45% of all wages
- Additional Medicare Tax: +0.9% if you earn more than $200,000 (single) or $250,000 (married)

Together, that’s 7.65% for most people—and your employer pays another 7.65% on top. If you’re self-employed, you’re on the hook for the full 15.3%.

whether Texans pay FICA on their paychecks

Example: Texas Paycheck Breakdown (2025)

Let’s say you’re single, earn $75,000/year, contribute 5% to your 401(k), and have no other deductions. Here's what a monthly paycheck might look like:

Category	Amount
Gross Monthly Pay	$6,250
401(k) (5%)	–$312.50
Taxable Income	$5,937.50
Federal Income Tax	–$750.00 (approx.)
Social Security (6.2%)	–$368.13
Medicare (1.45%)	–$86.08
Take-Home Pay	$4,733.29

Note: Actual figures vary based on your W-4, benefits, and frequency.

Bonuses, Overtime & Commission: How They're Taxed

If you earn extra money—whether it’s a bonus, overtime, or commission—it’s taxed, but not always the same way as your regular salary.

Options for Taxing Bonuses:
- Aggregate method: It’s lumped into your regular paycheck and taxed normally.
- Percentage method: A flat 22% federal tax is withheld (2025 rate), plus FICA.

Say you get a $5,000 bonus:
- Federal tax withheld: $1,100 (22%)
- Social Security: $310
- Medicare: $72.50
- Take-home: around $3,517.50

Not all employers handle it the same way, and large bonuses may push you into a higher tax bracket temporarily.

Pre-Tax Deductions That Lower Your Taxable Income

Want to take home more without earning more? Reduce your taxable income. Here’s how:

- 401(k) or 403(b) contributions
- HSA or FSA payments
- Commuter benefits
- Health and dental insurance premiums

If you earn $90,000 but put $10,000 into your 401(k), the IRS only taxes $80,000. That could save you $2,200+ in federal tax alone.

Why Your Texas Paycheck Might Be Lower Than Expected

There are a few reasons your net pay could be less than you assumed:

- You updated your W-4 and didn’t notice higher withholding.
- You received a bonus taxed at 22%.
- You hit the Additional Medicare Tax threshold ($200k+).
- You started paying off student loans through wage garnishment.
- Your employer started taking out pre-tax benefits like health insurance.

why your Texas paycheck might be smaller than expected

FAQs

Do Texans pay state income tax?
Nope. Texas is one of nine states with no personal income tax.

Can I change how much tax is withheld?
Yes. File a new Form W-4 with your employer.

Are FICA taxes optional?
Not unless you qualify for very rare exceptions (like certain foreign government workers or specific religious groups).

How do I check my paycheck deductions?
Look at your pay stub or use our net salary calculator to estimate.

What if I'm self-employed in Texas?
You’ll pay both the employee and employer share of FICA (15.3%), plus income tax. But you can deduct half the self-employment tax when filing.

Final Thoughts

Just because Texas skips state income tax doesn’t mean your paycheck is tax-free. Between federal income tax, FICA, and other deductions, it’s common to lose 20%–30% of your paycheck before it hits your bank account. The good news? You have some control. Adjust your W-4, contribute to pre-tax benefits, and stay informed.

Want to see exactly how your salary breaks down? Plug your numbers into our

Texas net salary calculator. It takes just a minute—and could help you spot easy ways to boost your take-home pay.