Is Texas Really Better for Take-Home Pay? Comparing Life After Tax in 2025
By Team SalaryCalculate · 6/26/2025
Why People Say “Texas Pays More”
You’ve probably heard it before:
“Move to Texas — you’ll keep more of your paycheck.”
It’s partly true. In 2025, Texas still has no state income tax, which can mean thousands of dollars more in your pocket compared to states like California or New York. But is take-home pay alone enough to make it the better choice?
Let’s dig into the real-life impact of your salary in Texas, from paychecks to cost of living.
What You Actually Keep From a Texas Paycheck
No state tax = ✔️ more gross-to-net consistency
But you still pay:
- Federal income tax (based on income bracket)
- Social Security (6.2%)
- Medicare (1.45% + 0.9% for high earners)
📌 Example:
On a $100,000 salary in 2025, you’ll typically take home $75,000–$77,000, depending on benefits and deductions — significantly more than the same salary in New York or California.
But What About Cost of Living?
Texas is cheaper than the coasts — but it’s not always cheap.
| Category | Texas (Average) | California | New York |
| Rent (2-bed) | ~$1,450/mo | $2,800+ | $3,200+ |
| Gasoline | ~$3.10/gal | ~$5.00 | ~$4.70 |
| Groceries | National average | +15–25% | +10–20% |
| Property Tax | High (1.6%+) | Lower (~0.7%) | ~0.9% |
✅ Lower income tax
❌ Higher property tax
💰 But overall: better take-home vs. cost ratio
Best Places in Texas for High Take-Home Pay + Lower Expenses
- San Antonio: Affordable housing, decent salaries
- Dallas–Fort Worth: Big job market with no state tax
- Austin: Higher cost, but great tech salaries
- El Paso & Lubbock: Very low cost, but lower average pay
Would You Earn Less Elsewhere?
Let’s compare $70k gross salary in 3 locations:
Texas
- No state tax
- Take-home: ~$58,000/year
California
- State tax: ~8–9%
- Take-home: ~$53,000/year
New York
- State + city tax: up to 10–12%
- Take-home: ~$51,000/year
That’s a $7,000+ difference, and it grows with income.
Final Verdict: Is Texas Worth It for Salary?
✅ Yes, if:
- You’re earning a solid income and want lower taxes
- You can avoid high property tax areas or rent instead
- Your industry pays well (tech, healthcare, energy, finance)
❌ Maybe not, if:
- You’re on a lower salary and moving to high-cost areas like Austin
- You’d lose key benefits (like union protections or bonuses) elsewhere
Bonus: Texas-Specific Salary Questions in 2025
Q: Can I work remotely in Texas for a company in another state?
Yes — and in most cases, you pay taxes based on where you live, not where your employer is.
Q: Do Texas employers offer fewer benefits?
Not necessarily — but many companies emphasize higher salary over expensive benefits. Always compare total compensation.
Q: What’s the best city in Texas for tech workers?
Austin is top for tech jobs, but Dallas and Houston offer strong pay with lower living costs.
Want to See the Numbers?
Use our selection of Texas Salary Calculators to get a personalized breakdown of:
- Federal tax
- FICA
- Take-home pay
- Annual vs. monthly comparison
- Bonus
- Second Job
- Pro rata salary
🧾 Tax & Salary References
- IRS Tax Withholding Estimator
Helps readers calculate federal income tax more precisely.
https://www.irs.gov/individuals/tax-withholding-estimator - U.S. Bureau of Labor Statistics (BLS) – Texas Wages
Up-to-date wage and employment stats by industry and region.
https://www.bls.gov/oes/current/oes_tx.htm - Texas Comptroller – No State Income Tax Explanation
Confirms Texas’s tax structure directly from the state.
https://comptroller.texas.gov/taxes/ - Social Security Wage Base Limit (2025)
Details on the Social Security tax cap.
https://www.ssa.gov/news/press/factsheets/colafacts2025.pdf - Medicare Additional Tax – IRS
Covers the 0.9% surcharge on high earners.
https://www.irs.gov/newsroom/questions-and-answers-for-the-additional-medicare-tax