California vs Texas
After-Tax Salary Calculator

How Much More Do You Keep in Texas vs. California?

If you earn $100,000 a year, moving from California to Texas puts roughly $5,500–$7,500 more per year in your pocket — the exact amount depends on your filing status, deductions, and overtime pay. That’s not a trivial number. Over 10 years, compounded and invested, that difference can amount to six figures in real wealth.

The reason is straightforward: California levies a state income tax on most earners (peaking at 13.3% for top earners — the highest of any U.S. state), plus a 1.1% State Disability Insurance (SDI) contribution. Texas has no state income tax whatsoever — a constitutional prohibition baked into the Texas state constitution since 1993.

Take-Home Pay by Salary Level: California vs. Texas (2026)

Here’s how the difference scales across common salary levels for a single filer using 2026 federal tax brackets:

* Estimates based on standard deduction, no retirement contributions. Use the calculator above for your exact situation.

Why the Gap Widens at Higher Salaries

California uses a progressive income tax with nine brackets, and the marginal rate climbs steeply. A $100,000 earner pays around 6% on a portion of income in California; a $200,000 earner is hitting the 9.3% bracket on much of their salary; a $500,000 earner faces 12.3%, and a $1M+ earner reaches 13.3% — plus a 1% mental health surcharge. Texas charges $0 at every level. This is why tech executives and business owners with equity compensation see the most dramatic difference.

California vs. Texas Taxes: A Complete Side-by-Side Comparison

The 2026 OBBBA Overtime Exemption: Who Benefits More?

The One Big Beautiful Budget Act (OBBBA), signed in 2025, created a federal income tax exemption on overtime wages — up to $12,500 per year for single filers. This applies to federal tax only. California taxes overtime as regular income under state law. Texas residents get the full federal benefit with no state tax on top. If you work significant overtime, the gap between California and Texas widens substantially.

Example: A nurse earning $90,000 base + $15,000 overtime would see California tax the full $15,000 at state rates (~6–9%). A Texas nurse pays no state tax on it, and gets the $12,500 federal OBBBA exemption applied to their federal return. The total difference on overtime alone: potentially $3,000–$4,000/year.

Should You Move from California to Texas? The Honest Math

The tax savings are real, but a move from California to Texas isn’t a pure financial win for everyone. Here’s a practical breakdown by situation:

🏆 Texas is Clearly Better For:

• High earners ($150K+): The state income tax savings alone at $200,000 exceed $15,000/year. The break-even on moving costs happens within months.
• Frequent overtime workers: California taxes your OT as regular income. Texas + OBBBA exemption is a significant advantage.
• Remote workers with location flexibility: If your employer lets you work from anywhere and your income is $100K+, the move calculus is almost always in Texas’s favor.
• Investors with capital gains: California’s capital gains are taxed as ordinary income at up to 13.3%. Texas has no state capital gains tax.
• Business owners and LLCs: Texas has no franchise tax for most small businesses (under $2.47M revenue threshold). California has an $800 minimum franchise tax plus 1.5% LLC fee.

⚖️ The Calculation Is Closer For:

• Homeowners in established California neighborhoods: Prop 13 limits California property tax increases. A family that bought in 2010 may pay far less in property tax than a similar Texas homeowner despite having a higher-value home.
• Families with children in public schools: California and Texas public school quality varies enormously by district. Don’t assume Texas is uniformly better or worse — research your specific destination district.
• Mid-range salaries ($50K–$80K): The California tax savings at this level are real but more modest ($2,500–$5,000/year). Weigh against cost-of-living differences and lifestyle preferences.

🐻 California Still Makes Sense If:

• You work in an industry highly concentrated in California (entertainment, VC-backed tech, film production) where the networking and opportunity premium exceeds the tax cost.
• You have California public pension benefits (CalPERS, CalSTRS) that are tied to continued California residency.
• You’re a renter in a rent-controlled unit — California’s tenant protections are among the strongest in the U.S., and leaving can mean losing a subsidized housing situation.

How We Calculate Your Take-Home Pay

Our California vs. Texas take-home pay calculator uses the following inputs and logic for the 2026 tax year:

Federal Income Tax (Both States)

We apply the 2026 IRS income tax brackets, adjusted for the OBBBA inflation provisions, and subtract the standard deduction ($15,000 single / $30,000 married filing jointly / $22,500 head of household for 2026). The OBBBA overtime exemption (up to $12,500/year for qualified overtime wages, single filer) is applied before federal tax calculation where applicable.

FICA Taxes (Both States)

Social Security tax is 6.2% on wages up to $176,100 (2026 wage base estimate). Medicare is 1.45% on all wages, plus an additional 0.9% on wages exceeding $200,000 for single filers ($250,000 married). Both California and Texas employees pay identical FICA taxes — this is federally mandated.

California State Income Tax

California has nine tax brackets ranging from 1% to 13.3% (including the 1% Mental Health Services Tax on income over $1 million). We apply California’s standard deduction ($5,540 single / $11,080 married, 2026) and the applicable personal exemption credit before calculating state liability.

California SDI

Since January 1, 2024, California’s SDI rate of 1.1% applies to all wages with no cap. This is automatically deducted from California employees’ paychecks.

Texas State Income Tax

Texas does not impose a state income tax on individuals. The Texas Constitution explicitly prohibits a personal income tax without a public referendum. There is no state-level withholding, no SDI equivalent, and no local income tax in any Texas city or county.

Disclaimer: This calculator provides estimates for educational purposes. Individual circumstances including 401(k) contributions, HSA elections, dependents, itemized deductions, and other factors will affect your actual take-home pay. Consult a tax professional for your specific situation.

California vs. Texas Salary Questions Answered