TEXAS PAYROLL RESOURCES · TX · REVIEWED 2026-10-03
Review Texas earnings-statement rules, unemployment-tax resources, workers’ compensation considerations, and official payroll guidance. Run payroll for a small team and get employee statements from every calculated run.
AT A GLANCE
Texas payroll is unusual because its state earnings-statement rule sits inside a minimum-wage chapter with a major exemption for people covered by the federal Fair Labor Standards Act. Texas also has no individual state income-tax withholding, uses employer unemployment taxes, and allows most private employers to choose whether to carry workers’ compensation insurance.
Texas Labor Code section 62.003 requires a written earnings statement at the end of each pay period when Chapter 62 applies. Section 62.151, however, provides that the chapter does not apply to a person covered by the federal Fair Labor Standards Act.
See coverage details →Texas does not impose a personal state income tax, so there is no Texas individual income-tax withholding from employee wages.
View Texas tax context →New Texas employers generally use a 2.70% unemployment tax rate for approximately their first six calendar quarters. Texas unemployment tax applies to the first $9,000 of each employee’s annual wages.
View unemployment-tax information →Most Texas private employers may choose whether to carry workers’ compensation insurance. Employers that do not provide coverage become non-subscribers and have notice and reporting obligations.
View official guidance →STATE PAYROLL OVERVIEW
Texas Labor Code section 62.003 says that, at the end of each pay period, an employer covered by that chapter must give each employee a written earnings statement showing the employee’s name, rate of pay, total pay, deductions and their purpose, net pay, and hours or piece-rate units when applicable.
The critical Texas distinction is section 62.151: Chapter 62 does not apply to a person covered by the federal Fair Labor Standards Act. That means the Texas earnings-statement rule should not be described as a universal state pay-stub mandate for every private employee. Coverage must be considered before relying on section 62.003.
Texas also does not impose an individual state income tax. Payroll preparation therefore focuses on federal withholding, Texas unemployment tax, the employer’s workers’ compensation status, and any other state or federal obligations that apply to the employer and employee.
PAYROLL REQUIREMENTS CHECKLIST
Use this checklist to separate the Texas Labor Code earnings-statement rule from the federal coverage exemption and the other payroll responsibilities that can still apply.
Before treating section 62.003 as the governing earnings-statement rule, determine whether the employee is covered by the Fair Labor Standards Act. Section 62.151 exempts FLSA-covered persons from Chapter 62.
The statement must show the employee’s name, rate of pay, total pay earned, each deduction and its purpose, net pay, and either total hours worked for hourly employees or units produced for piece-rate employees.
Texas does not impose an individual state income tax, so there is no Texas personal income-tax withholding calculation to apply to wages.
Review Texas unemployment-tax liability, workers’ compensation coverage or non-subscriber duties, federal withholding, and applicable federal wage-and-hour recordkeeping requirements.
PAYROLL RECORDS IN PRACTICE
When section 62.003 applies, the earnings statement may be in any form determined by the employer, and the required information may appear on a check voucher or bank draft given to the employee.
Section 62.003 establishes the statement contents but does not itself create a special pay-stub retention period. Employers should preserve the wage, hour, tax, and unemployment records required by the federal and Texas rules that apply to their business.
NO TEXAS INDIVIDUAL INCOME-TAX WITHHOLDING
Texas does not impose a personal state income tax. Employers therefore do not calculate a Texas individual income-tax withholding amount from employee wages, but federal withholding and Texas unemployment-tax obligations can still apply.
New employers generally use a 2.70% unemployment tax rate for approximately their first six calendar quarters. The taxable wage base is the first $9,000 of each employee’s annual earnings.
View TWC tax-rate information →Use the current federal withholding rules and the employee’s Form W-4 for federal income-tax withholding. Texas does not replace the federal calculation with a state income-tax calculation.
View IRS Publication 15 →LOCAL CONSIDERATIONS
Texas Labor Code section 62.151 states that Chapter 62 and municipal ordinances or charter provisions governing wages in private employment—other than wages under a public contract—do not apply to a person covered by the FLSA. Local business requirements may still matter, but private payroll should not assume that Austin, Dallas, Houston, or San Antonio each has a separate general pay-stub regime.
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OFFICIAL TEXAS SOURCES USED FOR THIS PAGE
This guidance is based on official Texas sources. Coverage rules, tax rates, and employer obligations can change, so recheck the applicable source before acting.
Primary statutory source for the Texas earnings-statement provision and its FLSA-coverage exemption.
Employer unemployment-tax guidance, taxable-wage information, and rate-estimation resources.
Official guidance on subscriber and non-subscriber coverage status and employer responsibilities.
Official state resource explaining Texas’s lack of personal income tax and broader business-tax context.
RESEARCH & REVIEW
This page is built from primary Texas statutes and state-agency resources and is periodically reviewed against current guidance. We use official labor, unemployment-tax, workers’ compensation, and tax sources whenever available.
FREQUENTLY ASKED QUESTIONS
ACCURATE RECORDS. SUPPORTING EVIDENCE.
Prepare a Texas Pay Run, review the calculations and records before completion, and keep the applicable Texas and federal sources with your payroll workflow.