Texas Bonus Tax Calculator 2025
Calculate your bonus taxes with accurate 2025 federal rates - No Texas state income tax
Texas Bonus Tax Rate 2025
Texas has NO state income tax on bonuses - making it one of the most bonus-friendly states in America. Texas doesn't have an individual income tax, so income sources like bonuses are not taxed at the state level.
Your total bonus taxes in Texas include:
- Federal withholding: 22% (for bonuses under $1 million)
- Texas state tax: 0% - NO STATE TAX!
- Social Security: 6.2%
- Medicare: 1.45%
- Total combined rate: Only 29.65%
🎉 Texas Bonus Tax Advantage
No state tax means you keep 6-10% more of your bonus compared to high-tax states like New York or California. This can mean hundreds or thousands more in your pocket!
How Texas Bonus Taxes Work
Bonuses and stock options are subject to federal taxes, but there's no additional state income tax on these earnings in Texas. Your employer withholds the standard 22% for federal taxes when your bonus comes in a separate check, plus FICA taxes - and that's it!
What Makes Texas Different
Texas is one of nine states — along with Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington and Wyoming — that do not have an income tax. This means every dollar of your bonus avoids state taxation completely.
Real Texas Bonus Examples - What You'll Actually Get
| Bonus Amount | Federal (22%) | TX State Tax | Social Security (6.2%) | Medicare (1.45%) | Take-Home |
|---|---|---|---|---|---|
| $1,000 | $220 | $0 | $62 | $14.50 | $703.50 |
| $3,000 | $660 | $0 | $186 | $43.50 | $2,110.50 |
| $5,000 | $1,100 | $0 | $310 | $72.50 | $3,517.50 |
| $10,000 | $2,200 | $0 | $620 | $145 | $7,035 |
Calculations based on 2025 tax rates. Your actual withholding may vary based on your W-4 elections.
Texas vs. Other States - The No-Tax Advantage
| State | State Tax Rate | Total Tax Rate | Take-Home on $5,000 | Texas Advantage |
|---|---|---|---|---|
| Texas | 0% | 29.65% | $3,517.50 | Base |
| Florida | 0% | 29.65% | $3,517.50 | Same as Texas |
| Nevada | 0% | 29.65% | $3,517.50 | Same as Texas |
| Arizona | 2.5% | 32.15% | $3,392.50 | +$125 in Texas |
| Colorado | 4.4% | 34.05% | $3,297.50 | +$220 in Texas |
| California | Up to 13.3% | Up to 42.95% | $2,852.50 | +$665 in Texas |
| New York | Up to 10.9% | Up to 40.55% | $2,972.50 | +$545 in Texas |
Bottom line: Texas ties with other no-tax states as the most bonus-friendly in America.
Texas Cities - Same Zero Rate Everywhere
Excellent news for Texas workers - there's no city or local income tax anywhere in the state. Your bonus tax rate is identical whether you work in:
- Houston - Largest city, same 0% state tax
- San Antonio - No additional city taxes
- Dallas - Zero local income tax
- Austin - State capital, no state tax
- Fort Worth - No local tax burden
- El Paso - Same statewide advantage
- Arlington - No city income tax
- Corpus Christi - Zero additional taxes
This makes Texas much simpler than complicated states like Ohio or Pennsylvania where different cities can add their own income taxes on top of state taxes.
Smart Bonus Strategies for Texas Workers
How to Maximize Your Texas Bonus
Since Texas has no state tax, your optimization focuses entirely on reducing federal taxes:
- 401(k) contributions: Contributing to a 401(k) or IRA (up to $23,500 for 401(k) in 2025) reduces taxable income, lowering taxes
- HSA maximization: Health Savings Account contributions reduce federal taxable income
- Traditional IRA: Additional pre-tax savings if you qualify
- Timing bonuses: Consider year-end timing for maximum retirement contributions
Texas Bonus + Retirement Strategy
With no state tax to worry about, you can focus on these federal tax reduction strategies:
- Maximize 401(k): $23,500 limit for 2025 ($31,000 if 50+)
- Backdoor Roth: Convert traditional IRA to Roth while in Texas
- HSA triple advantage: Deductible, grows tax-free, tax-free withdrawals for medical
- Dependent care FSA: Up to $5,000 pre-tax for childcare
Frequently Asked Questions
How much are bonuses taxed in Texas?
Bonuses in Texas are only subject to federal taxes: 22% federal withholding, 6.2% Social Security, and 1.45% Medicare. Total effective rate is 29.65% - there's no state income tax in Texas.
Is Texas a good state for bonus taxes?
Yes, Texas is one of the best states for bonuses since there's no state income tax. You'll save 6-10% compared to high-tax states like California or New York.
How much will I take home from a $5,000 bonus in Texas?
Approximately $3,517.50 after federal taxes (22%), Social Security (6.2%), and Medicare (1.45%) - no state tax deductions.
Do I pay city taxes on bonuses in Texas?
No, Texas has no local income taxes on bonuses or regular income in any city, including Houston, Dallas, Austin, or San Antonio.
Can I reduce my Texas bonus taxes?
Yes, by:
- Increasing 401(k) contributions (up to $23,500 in 2025)
- Contributing to traditional IRAs
- Maximizing HSA contributions
- Using dependent care FSAs
Does Texas tax bonuses differently than regular income?
No, Texas doesn't tax bonuses or regular income at all - there's no state income tax.
What if I move to Texas mid-year after receiving a bonus?
You'll still owe state taxes to your previous state for the bonus received there. Only bonuses received while a Texas resident avoid state taxation.
Are stock options and RSUs taxed like bonuses in Texas?
Yes, stock compensation has the same Texas advantage - no state tax when stocks vest or options are exercised, only federal taxes apply.
Should I change my withholding to keep more of my bonus?
Be careful - you'll still owe the same federal taxes at year-end. Since Texas has no state tax, focus on federal withholding optimization with a tax professional.
How does the Texas bonus advantage compare long-term?
Over a career, the Texas no-tax advantage on bonuses can save tens of thousands compared to high-tax states, especially for high earners receiving regular bonuses.