Remote’s guide to employing in

Texas
texas flag

Make employment in Texas easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Texas, all in one easy-to-use platform.

  • Capital City

    Austin

  • Currency

    United States Dollar ($, USD)

  • Population size

    29,000,000

Services available in this country:
Employer of Record ProductPayrollContractor Management
Austin, Texas

Facts & Stats

  • Capital City

    Austin

  • Currency

    United States Dollar ($, USD)

  • Population size

    29,000,000

  • VAT - standard rate

    6% (Higher in some cities and regions )

With a larger landmass than the UK and Germany combined, Texas famously goes big — in every sense.

Famed for its vast oil reserves, iconic cowboy culture, and important historical legacies, the Lone Star State is also one of the country’s strongest economic centers. With a thriving tech scene in the state capital, Austin, and a rich, multicultural heritage that embraces diversity and creativity, Texas is an excellent destination for businesses and talent alike.


Grow your team in Texas with Remote

If you want to hire in Texas, you’ll need to own a legal entity there — or partner with a global employment solutions provider, like Remote.

We can employ top talent in Texas on your behalf and manage complex HR tasks such as onboarding, payroll, benefits, and taxes. You can also manage and pay your contractors in Texas through Remote.

Risks of misclassification

Texas, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Texas may lead to fines and penalties for the offending company.

Austin, Texas

Employing in Texas

In Texas, workers’ rights are protected by numerous employment and labor laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.

Here are the key things you need to know about hiring in Texas.

Hours of work in Texas

In Texas, the regulations and edicts around working hours and overtime are primarily covered by the Texas Labor Code.

What is considered full-time employment in Texas?

Full-time employment is generally considered to be between 30 and 40 hours per week.

Do salary employees get overtime in Texas?

Under the federal Fair Labor Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.

Employees are generally (but not always) exempt from overtime if they:

  • Earn more than the specified state or federal exemption threshold

  • Perform a role with duties that are considered executive or managerial

  • Work in a certified or licensed profession, such as law, accounting, architecture, or engineering

In Texas, the salary threshold for exemption is currently $684 per week, which is the federal minimum.

Note that the federal salary threshold for exemption is currently being reviewed in the US.

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Competitive benefits in Texas

Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Texan labor market, allowing your employees to feel appreciated and thrive.

Our benefits packages in Texas usually include some or all of the following:

  • Pension or 401(K)

  • Vision Insurance

  • Medical Insurance

  • Health Saving Plan (HSA)

  • Long term disability insurance (LTD)

  • Dental Insurance

  • Life Insurance

  • Flexible Spending Account (FSA)

Are employers required to provide health insurance in Texas?

Under the federal Affordable Care Act, organizations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.

Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency. 

Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.

Note that we do not add a markup on any benefits premiums or administration costs.

Do part-time employees get benefits in Texas?

Employees are only legally entitled to health insurance and other benefits if they regularly work more than 30 hours per week. 

Are employers required to offer 401k in Texas?

No. Organizations are not legally required to offer a 401k retirement plan (or any other type of savings plan) to their employees. However, they may choose to offer this benefit as part of their overall compensation package.

Taxes in Texas

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Texas.

Employer taxes

Employment Tax

6%

Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year)

0.23% to 6.23%

State unemployment insurance tax (SUTA)

6.2%

FICA (Social security)

1.45%

FICA (Medicare)

Employee taxes

Payroll Tax

10% to 37%

Federal income tax

6.2%

FICA (Social security)

1.45%

FICA (Medicare)

Types of leave

Vacation

In Texas, there is no state or federal law that requires employers to provide paid or unpaid vacation leave to their employees, although many organizations do.

Sick leave

In Texas, there is no state or federal law that requires employers to provide paid sick leave to their employees, although many organizations do.

Can an employer deny sick time in Texas?

Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they:

Have worked for the same employer for at least 12 months

Work in a location where at least 50 people are employed by the company within a 75-mile radius

Parental and maternity leave

Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organizations opt to pay a reduced salary during this period.

Bereavement leave

Employers are not legally required to provide bereavement leave to their employees, although most organizations offer unpaid leave.

Jury duty

Employees must report for jury duty if summoned (unless exempt). Jurors are typically “on call” for two weeks.


Do employers have to pay for jury duty in Texas?

No. Private sector employers are not required to pay employees on jury service, but they must provide unpaid leave, and cannot penalize or terminate an employee on jury duty. Some employers provide paid leave.

Military leave

Under federal law, employers must grant leave to employees who are members of the military or the National Guard for military duty or training.

These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service.

Employment termination

Termination process

Like nearly all US states, Texas is an “at-will” state. This means both employers and employees can end the employment relationship without reason, provided it is legal.

Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.

Notice period

Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.

Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organization.

Severance pay

Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).

Employers are also not required to pay any accrued but unused vacation time, unless stipulated in the employment agreement.

Probation periods

There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.