What payroll taxes does a Texas employer pay?

Employers owe the FICA match (6.2% Social Security up to the wage base plus 1.45% Medicare on all wages), federal FUTA at an effective 0.6% on the first $7,000, and Texas state unemployment insurance (SUI) on the first $9,000 of each worker's wages. Texas has no state income or SDI tax.

What is the Texas SUI taxable wage base?

Texas levies state unemployment tax on the first $9,000 of each employee's annual wages. Above that, no further Texas SUI is due for that worker in the year, so high earners cap out the SUI cost quickly.

What is the Texas new-employer SUI rate?

New employers in Texas are commonly assigned a rate around 2.7%, or the average rate for their industry if higher. Experienced employers receive a rate based on their own unemployment claims history, which can be higher or lower.

How does the FUTA credit work?

The federal FUTA rate is 6.0% on the first $7,000 of wages, but employers who pay their state unemployment tax on time receive a 5.4% credit, dropping the effective FUTA rate to 0.6%, or about $42 per employee per year.

Does Texas have any state-specific employer payroll tax?

Beyond SUI, no. Texas has no state income tax withholding obligation, no employer-side disability insurance, and no paid family and medical leave payroll tax, which keeps the Texas employer burden lower than in many states.

Texas Employer Payroll Tax Calculator

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The Texas employer payroll tax calculator totals what an employer actually owes on top of wages for Texas workers. Texas keeps the employer burden relatively light: there is no state income tax and no employer SDI or PFML tax, so the load is the federal FICA match, FUTA, and Texas state unemployment insurance (SUI). Enter wages, headcount, and your SUI rate to see the full picture.

How it works

For each employee the tool applies four pieces. The Social Security match is 6.2% up to the $168,600 wage base; Medicare is 1.45% on all wages with no cap. FUTA is an effective 0.6% on the first $7,000 (the 6.0% gross rate minus the 5.4% state credit), about $42 per worker. Texas SUI is your assigned rate — commonly 2.70% for new employers — on the first $9,000 of wages, so 2.70% × $9,000 = $243. At $50,000 wages that is $3,100 Social Security, $725 Medicare, $42 FUTA, and $243 SUI: $4,110 per employee, scaled by headcount.

Tips and notes

The calculation assumes each employee earns at least the wage bases ($9,000 for SUI, $7,000 for FUTA), which is true for most full-time staff. Your real SUI rate appears on your Texas Workforce Commission rate notice and reflects your claims history; experienced employers can be well above or below the new-employer rate. The FUTA credit requires paying state unemployment tax on time — late payment can raise the effective FUTA rate. Verify rates at twc.texas.gov and irs.gov.