Texas vs California: on the same salary, you keep more money in Texas than in California, and the gap grows as you earn more. On $100,000, a single worker takes home $79,180 in Texas versus $72,825 in California: a difference of $6,355 a year.
Side-by-side take-home pay
| Salary | Texas | California | Extra in Texas |
|---|---|---|---|
| $40,000 | $34,320 | $33,217 | $1,103 |
| $60,000 | $50,390 | $47,970 | $2,420 |
| $80,000 | $65,110 | $60,875 | $4,235 |
| $100,000 | $79,180 | $72,825 | $6,355 |
| $150,000 | $113,791 | $102,136 | $11,655 |
Single filer, 2026 tax year, standard deduction.
Why California takes more
- State income tax: nine brackets from 1% to 13.3%. On $100,000, California income tax alone is $5,055.
- SDI: $1,300 of State Disability Insurance on $100,000, with no wage cap.
- Texas has no personal income tax, so only federal tax and FICA come out of your paycheck.
The costs your paycheck doesn’t show
- Texas property taxes are among the highest in the country, which matters if you buy a home.
- Housing in major California metros costs much more, which can outweigh or amplify the tax gap.
- Salaries for the same job are often higher in California, especially in tech.
The fair comparison is take-home pay minus housing, for the salary you would actually earn in each state.
Remote workers
If you move to Texas and keep working remotely for a California employer, you generally stop owing California tax on wages earned while living in Texas. Update your address with your employer so California withholding stops.
How the gap grows with income
At $40,000, the difference between Texas and California is modest because California’s first brackets are low (1% to 4%) and its standard deduction absorbs part of the income. From about $70,000, California income falls into the 8% and 9.3% brackets, and the gap widens quickly. High earners also pay the 1% mental health surcharge on income above $1 million.
Married couples
California’s brackets double for married couples filing jointly, as do federal brackets, so a single-income couple pays less state tax than a single filer at the same salary. In Texas, filing status only changes federal tax.
Retirement and investment income
- California taxes capital gains as ordinary income, at up to 13.3%.
- Texas does not tax capital gains, dividends or retirement income at the state level.
- Neither state taxes Social Security benefits.
Which is better for you?
If you can keep a California-level salary while living in Texas, for example with a remote job, the tax savings are real and immediate. If moving means a lower salary, compare your take-home pay minus housing costs in both places before deciding. For homeowners, factor in Texas property taxes, which are often 1.5% to 2.5% of a home’s value each year.
Explore more with the Texas paycheck calculator and the California paycheck calculator.
Texas vs California: a worked example on $100,000
Here is where the $6,355 gap on a $100,000 salary comes from. Federal income tax, Social Security and Medicare are the same in both states, so the whole difference comes from California’s state taxes:
| Item | Texas | California |
|---|---|---|
| Take-home pay | $79,180 | $72,825 |
| State income tax | $0 | $5,055 |
| State Disability Insurance | $0 | $1,300 |
| Per month | about $6,598 | about $6,069 |
$5,055 of income tax plus $1,300 of SDI equals exactly $6,355, or about $530 a month.
How to run the Texas vs California comparison for your own move
- Use the salary you would really earn in each state. A lower Texas salary can cancel the tax savings.
- Subtract housing costs for the city you are considering, including property taxes if you plan to buy.
- Compare what is left each month, not the gross salary or the tax rate alone.
Texas vs California at other salaries
The same logic applies at every income level in the table above. At $40,000, California’s low first brackets and its standard deduction keep the gap to $1,103 a year, about $92 a month. At $150,000, the gap reaches $11,655, nearly $1,000 a month, because more income falls into California’s 9.3% bracket and SDI has no wage cap. In the Texas vs California choice, the higher your salary, the more the state tax matters compared with other costs.
Common mistakes
- Assuming Texas has no taxes at all: sales and property taxes still apply.
- Forgetting SDI, which is withheld on every California paycheck.
- Keeping your old address on file after moving, so California tax is still withheld.
For California rules on residency and part-year returns, see the California Franchise Tax Board. If you move during the year or keep income from California, a tax professional can help you file correctly in the Texas vs California transition year.
Frequently asked questions
How much more do you take home in Texas than in California?
On $100,000, about $6,355 more a year for a single filer.
Why is California take-home pay lower?
California charges state income tax up to 13.3% and withholds 1.3% of wages for State Disability Insurance.
Is it cheaper to live in Texas?
Housing is usually cheaper, but Texas property taxes are high, so compare total costs.
Estimates for information only, not tax advice.
