TX · Cost to hire 2026
How much does it cost to hire an employee in Texas?
The real first-year cost of a W-2 hire in Texas is the ongoing fully-loaded payroll plus the one-time spend to recruit, onboard, and equip the person. A $75,000 hire runs about $109,323 in year one.
Hiring in Texas means budgeting for a first-year number that runs well above the salary line, even in a state with no income tax. Year one is the sum of ongoing fully-loaded payroll plus the one-time cost of standing up a new worker: recruiting, onboarding and training, and equipment and setup, which HiringMath models at roughly $8,500 one-time and about $1,500 a year in software. The recurring employer layer in Texas is moderate. The Texas Workforce Commission sets a new-employer State Unemployment Insurance rate of 2.7% on the first $9,000 of wages, capping SUI at $243 per worker, and Texas levies no state income tax, so there is no state withholding to remit. Federal FICA at 7.65% and net FUTA apply on top. Across Austin and Dallas-Fort Worth tech, Houston and Permian Basin energy, and statewide logistics and construction, the largest private-sector labor market in the contiguous US makes precise year-one math essential to protecting margin on every offer.
Estimate a Texas hire
Pre-filled with Texas's 2.7% new-employer SUI rate. Adjust salary, benefits, and one-time costs to fit your hire.
First-year cost of a $75,000 hire in Texas
| Recurring (annual) | |
| Base salary | $75,000 |
| Employer payroll taxes | $6,023 |
| Workers' comp | $750 |
| Benefits | $10,050 |
| Overhead | $7,500 |
| Software & toolsrecurs yearly | $1,500 |
| One-time (year one) | |
| Recruiting | $4,000 |
| Onboarding & training | $2,000 |
| Equipment & setup | $2,500 |
| Ongoing annual cost (year 2+) | $100,823 |
| Total first-year cost | $109,323 |
First-year cost by salary in Texas
| Base salary | First-year total |
|---|---|
| $50,000 | $78,910 |
| $75,000 | $109,323 |
| $100,000 | $139,735 |
What drives the cost in Texas
Texas's new-employer SUI rate is 2.7% on the first $9,000 of wages, a maximum of $243 per worker per year (above the national average of 2.07%). That sits on top of 7.65% employer FICA and 0.6% FUTA. Texas levies no state income tax, so there is no state withholding to administer.
Extra employer costs: No state income tax.
Compare and dig deeper
Weighing an employee against a contractor? See the Texas W-2 vs 1099 comparison for the breakeven contract rate. Compare neighboring markets, including Alabama, District of Columbia, Florida, Georgia, or read how much it costs to hire an employee nationally.
Cost-to-hire FAQ for Texas
- What is the true first-year cost to hire an employee in Texas?
- It is ongoing fully-loaded payroll plus one-time hiring costs. The recurring side includes salary, 7.65% FICA, net FUTA, SUI at 2.7% on the first $9,000, and benefits. The one-time side, defaulted in HiringMath to about $8,500 for recruiting, onboarding, training, and equipment, plus roughly $1,500 a year in software, lands almost entirely in year one.
- How much does Texas unemployment insurance cost per worker?
- New employers pay a 2.7% State Unemployment Insurance rate on the first $9,000 of each worker's wages, set by the Texas Workforce Commission. That caps the annual SUI cost at $243 per employee until an experience-based rate is assigned.
- Does no state income tax make Texas cheaper for employers?
- It removes state withholding administration, which lowers compliance overhead, but it does not reduce your direct payroll cost. The employer's recurring burden in Texas is FICA, net FUTA, and the 2.7% SUI contribution, on top of benefits and the one-time setup spend that defines the first year.