How to Calculate Taxes on Paycheck in Texas
Texas Tax Overview
- Texas has no state income tax
- Only federal taxes and FICA (Social Security & Medicare) apply
- Standard deductions and dependent credits are available
- Additional deductions may apply (401k, health insurance, etc.)
Step 1: Understand Your Gross Pay
Your gross pay is your total earnings before any deductions. This includes:
- Base salary
- Overtime pay
- Bonuses
- Commissions
Example:
If you earn $50,000 per year, your gross pay would be:
Annual Gross Pay = $50,000
Bi-weekly Gross Pay = $50,000 ÷ 26 = $1,923.08
Bi-weekly Gross Pay = $50,000 ÷ 26 = $1,923.08
Step 2: Calculate Federal Income Tax
Federal income tax is calculated using progressive tax brackets. For 2024:
2024 Tax Brackets (Single Filing):
- 10% on income up to $11,600
- 12% on income from $11,601 to $47,150
- 22% on income from $47,151 to $100,525
- 24% on income from $100,526 to $191,950
- 32% on income from $191,951 to $243,725
- 35% on income from $243,726 to $609,350
- 37% on income above $609,350
Federal Tax = (Income × Tax Rate) – Standard Deduction
Standard Deduction for 2024: $14,600 (Single)
Standard Deduction for 2024: $14,600 (Single)
Step 3: Calculate FICA Taxes
FICA (Federal Insurance Contributions Act) includes:
- Social Security: 6.2% of gross pay (up to $168,600 in 2024)
- Medicare: 1.45% of gross pay (no income limit)
Social Security Tax = Gross Pay × 0.062
Medicare Tax = Gross Pay × 0.0145
Medicare Tax = Gross Pay × 0.0145
Step 4: Consider Additional Deductions
Common pre-tax deductions include:
- 401(k) contributions
- Health insurance premiums
- Health Savings Account (HSA) contributions
- Flexible Spending Account (FSA) contributions
Note:
These deductions reduce your taxable income, potentially lowering your tax burden.
Step 5: Calculate Net Pay
Your net pay (take-home pay) is calculated as follows:
Net Pay = Gross Pay – Federal Tax – Social Security – Medicare – Other Deductions
Example Calculation:
For a $50,000 annual salary:
- Gross Pay: $50,000
- Federal Tax: ~$4,000 (approximate)
- Social Security: $3,100 (6.2%)
- Medicare: $725 (1.45%)
- Net Pay: ~$42,175
Important Notes
Remember:
- Texas has no state income tax, but you still pay federal taxes
- Keep track of all deductions and credits
- Consider consulting a tax professional for complex situations
- Tax laws and rates may change annually