1. What is Texas Wage Tax?

Texas wage taxes consist of federal income tax and FICA (Social Security and Medicare) taxes. While Texas has no state income tax, employees still pay federal taxes on their wages.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Federal Tax — Calculated as (Gross Wage × Federal Tax Rate)
• FICA — 7.65% of gross wage (6.2% Social Security + 1.45% Medicare)

3. Understanding Wage Taxes in Texas

Details: Texas is one of few states with no state income tax, but federal taxes and FICA still apply to wages. FICA is a fixed percentage while federal tax varies by income bracket.

4. Using the Calculator

Tips: Enter your gross wage amount and federal tax rate (percentage). The calculator will compute your federal tax, FICA, and total tax burden.

5. Frequently Asked Questions (FAQ)

Q1: Why doesn't Texas have state income tax?
A: Texas generates revenue through other taxes like sales tax and property taxes instead of a state income tax.

Q2: Is FICA the same for everyone?
A: The 7.65% rate applies to most employees. High earners may pay an additional 0.9% Medicare tax on wages above $200,000.

Q3: How do I know my federal tax rate?
A: Your effective federal tax rate depends on your income and filing status. Consult IRS tax brackets or your most recent tax return.

Q4: Are there local wage taxes in Texas?
A: No Texas cities impose local income taxes, though some have local sales taxes.

Q5: Do contractors pay these taxes?
A: Contractors pay self-employment tax (15.3%) which covers both employer and employee portions of FICA.