Payroll Cost per Employee in Texas
2026 estimates — total employer cost including taxes and benefits
Min wage in Texas: $7.25/hr (federal minimum) | SUTA: 0.25–8.25% on first $9,000
Calculate Total Payroll Cost in Texas
Payroll Tax Breakdown — Texas 2026
| Tax / Cost | Rate / Rule | Annual Amount |
|---|---|---|
| Base salary | Per agreement | $53,900 |
| Social Security (employer) | 6.2% on first $168,600 | $3,342 |
| Medicare (employer) | 1.45% of all wages | $782 |
| FUTA (federal unemployment) | 0.6% on first $7,000 | $42 |
| Texas SUTA | 0.25–8.25% on first $9,000 | $375 |
| Benefits (health, 401k, etc) | ~18% of salary (typical) | $9,702 |
| Total Employer Cost | $68,520 | |
Based on $53,900 median salary in Texas. SUTA rate shown is approximate average — actual rate depends on claims history. Additional: None — one of lowest employer tax burdens.
Payroll Requirements in Texas
1. Texas Payroll Tax & Compliance Overview
Texas has one of the lowest payroll tax burdens in the US — no state income tax, no state-level paid leave mandates, and workers' comp that is voluntary (though most employers purchase it). Texas's low minimum wage ($7.25/hr federal) and minimal state-level mandates make payroll administration straightforward. Texas is also unique in having no state income tax withholding requirements.
2. Top Tips for Texas Employers
Texas employers: your biggest compliance risk is federal FLSA (overtime) compliance, not state-level issues. Standard payroll software (Gusto, QuickBooks Payroll, ADP) handles Texas payroll with minimal configuration. Workers' comp is optional but strongly recommended — without it you lose common law defenses in injury lawsuits.
3. Key Texas Payroll Facts
- Minimum wage: $7.25/hr (federal minimum)
- State income tax: None (no state income tax)
- State unemployment (SUTA): 0.25–8.25% on first $9,000
- Additional: None — one of lowest employer tax burdens
Run Texas Payroll Automatically
Automated payroll software handles Texas tax calculations, filings, and W-2s for $40–$150/month.
Payroll Software Cost Comparison — Texas 2026
At $5,710/month total employer cost, automating payroll for $53,900 median salary employees costs 27% above base salary. Software adds just 0.1–0.3% but eliminates costly compliance errors.
| Software | Base Price | Per Employee |
|---|---|---|
| Gusto Top pick | $46/mo | +$6/emp/mo |
| QuickBooks Payroll Core | $45/mo | +$6/emp/mo |
| ADP Run Essentials | ~$65/mo | +$4/emp/mo |
| Rippling | $35/mo | +$8/emp/mo |
Prices as of 2026. All four platforms handle Texas state tax filings automatically. 10-employee team example: Gusto = $106/mo, QuickBooks = $105/mo, ADP ≈ $105/mo, Rippling = $115/mo.
Frequently Asked Questions
Texas Payroll Summary
- →Avg salary: $53,900/yr
- →Total cost: $68,520/yr
- →Overhead rate: ~27% above salary
- →Min wage: $7.25/hr (federal minimum)
- →State income tax: None (no state income tax)