California vs Texas taxes

Where the difference comes from

Federal income tax, Social Security and Medicare are identical in both states: the same salary pays exactly the same to Washington. The entire gap is California’s, and it has two parts.

California income tax. Nine brackets from 1% to 12.3%, plus a 1% surcharge above $1 million. On $75,000 a single filer pays $2,775 after the $5,706 standard deduction and the $153 exemption credit. On $150,000 it is $9,705.

SDI. California withholds State Disability Insurance at 1.3% of every dollar, with no cap: $975 on $75,000 and $3,250 on $250,000. It is easy to forget because it is not an income tax, but it comes out of every paycheck.

Texas has neither. There is no state income tax, and unemployment insurance there is paid by employers rather than deducted from wages. Together, California’s two lines cost a single filer $3,750 a year on $75,000.

Why the gap grows faster than the salary

Both of California’s lines scale with income, and the income tax scales faster than the salary itself. The graduated rates mean each extra dollar is taxed at a higher rate than the one before, and SDI never stops.

So the gap is $1,690 on $50,000, $6,355 on $100,000 and $22,255 on $250,000. Measured as a share of salary, California costs 3.4% of a $50,000 salary and 8.9% of a $250,000 one. Moving to Texas is worth most, in dollars and in percentage terms, to the highest earners.

The overall effective rate on $100,000 is 27.2% in California and 20.8% in Texas, with federal taxes counted in both.

What the take-home figure does not count

This comparison is about what reaches your bank account from a paycheck. It says nothing about what you then spend. Texas raises the money California raises through income tax in other ways, mostly through local property taxes and sales tax, and housing costs differ enormously between the two states and within each of them. Someone buying a home should weigh the property tax bill on that particular home, which can take back a large part of the income-tax saving.

Working remotely for a California employer

California taxes a nonresident only on income from California sources, and for wages that means the work physically performed in California. The Franchise Tax Board’s own guidance for part-year residents and nonresidents splits a salary by the share of workdays spent in the state. So a Texas resident working from home in Texas for a California company does not owe California tax on those days, while days worked in California are taxable there even for a nonresident. If your employer keeps withholding California tax after you move, have the withholding changed, and recover anything over-withheld on a Form 540NR.

Questions people ask

Do you take home more in California or Texas on $75,000?

Texas, by $3,750 a year, or $312 a month, for a single filer in 2026. That counts federal tax, Social Security, Medicare, state income tax and every state payroll deduction.

Is the difference the same at every salary?

No, but the same side stays ahead. The gap is $612 a year at $30,000 and $22,255 at $250,000, for a single filer.

Does Texas have a state income tax?

No. Texas levies no personal income tax, and no state payroll deduction comes out of an employee's pay either: unemployment insurance there is paid by employers. A Texas payslip shows federal income tax, Social Security and Medicare, and nothing from the state.

What is California SDI, and why does it matter here?

State Disability Insurance, withheld from every California paycheck at 1.3% of wages for 2026. It has no wage cap, so it grows with salary without limit. Texas has no equivalent deduction, so SDI is part of the gap at every income.

If I move from California to Texas partway through the year, which state taxes me?

California taxes what you earn while you are a California resident, and you file a part-year resident return for that year. Once you are a Texas resident, wages you earn working in Texas are not subject to California tax. The date your residency changes is the line, so keep a record of it.

What this comparison covers

Income tax and payroll deductions on wages: federal income tax, Social Security, Medicare, state income tax, every state payroll deduction. It does not compare sales tax, property tax, housing or the cost of living, which can outweigh the difference in take-home pay. Figures assume the standard deduction, no dependents and no pre-tax retirement contributions. See how we calculate.