Texas does not collect state income tax. Given you file as a single taxpayer, $97,000 will net you $75,979 paying only federal income taxes. This means you pay $13,600 in taxes on an annual salary of 97,000 dollars. Your average tax rate will be 14.0% and your marginal rate will be 22%
Income taxes depend on your filing status. This page calculates your taxes based on filing “single”. We are working on the tax calculations for filing “married jointly” or as “head of household”.
- Which Income Taxes do I Pay in Texas?
- Tax Rate on Extra Income (Marginal Tax Rate)
- Your Average Tax Rate
- Texas Tax Structure
- Budgeting with a $97,000 salary
- What is my Net Hourly Rate and Why do I Care?
- Is $97,000 a Good Salary in Texas?
- Key Takeaways
- Does higher income push you into a higher tax bracket?
Which Income Taxes do I Pay in Texas?
As a tax-payer, resident of the Lone Star State, you have to pay
- Federal income tax
- FICA taxes
- Social security
No state income tax No county or city income tax
We already calculated the federal income tax on 97,000 dollars.
In summary, your employer withholds three types of taxes from your paycheck. On a $97,000 salary, you owe $13,600 in federal income tax. Additionally, the employer will withhold $6,014.00 for social security and $1,406.50 for medicare.
We calculate the taxes here as annual amounts. Your employer will withhold the part applicable to each paycheck (monthly or bi-weekly).
Texas Income Tax
The state of Texas does not collect taxes on personal income.
Furthermore, no county or city in Texas collects taxes on personal income.
As a resident of Texas, you have to pay $0 (zero) in state taxes per year. This is calculated independent of your filing status. The information is up to date as of the year 2023.
TX Taxation Summary
With an income of $97,000 a year, you pay $13,600 in federal income tax and $7,420.50 in federally mandated insurance (FICA tax).
There are no further state income taxes withheld from your paycheck.
Tax Rate on Extra Income (Marginal Tax Rate)
Who doesn’t strive for extra income, such as overtime pay or a performance bonus? Most income tax rates rise with the income. Thus, you want to know which rate you are going to pay on additional income.
The federal tax rates rises with increasing income. Your federal marginal rate is 29.65%. This includes the FICA taxes Social Security and Medicare.
Example for Marginal Tax Rate
For example, an annual bonus of 1,000 dollars will increase your tax bill in Texas by $296.50. Your Federal marginal rate is 29.65%. You owe the Internal Revenue Service (IRS) $296.50 on that bonus.
Of that 1,000 dollars bonus, you will see only $703.50 in your paycheck. The government taxes you on that last 1,000 dollars at a rate of 29.65%.
Your Average Tax Rate
While the marginal tax rates look scary, your average tax rates are less so.
On an income of $97,000, you pay an average tax rate of 21.67%.
We base the average tax rate on the gross income without standard deductions.
Texas Tax Structure
Texas does not tax personal income. The Lone Star State does not tax business income either.
Other Taxes in Texas
Local Income Tax
Besides the state not collecting income tax, none of the counties and jurisdictions taxes personal income.
Sales Tax and Local Components
Texas collects 6.25% in state sales tax. Most local jurisdictions add district sales taxes that increase the tax paid by a buyer.
The state allows a max of 2% local sales tax in addition to the state sales tax. On average the localities do add 1.95% for a combined average rate of 8.20% sales tax.
You owe “use tax” when you buy goods and services outside of Texas and bring them into the state. The rate is the state wide 6.25% or what ever your local jurisdiction applies.
Property taxes in Texas are charged by the county you live in. The tax is calculated annually from the appraised value of your property times the local tax rate. The average property tax rate in Texas is 1.80%. This is currently the seventh-highest rate in the United States.
Budgeting with a $97,000 salary
Governments determine taxes on a yearly basis. However, you pay rent, utility bills, and car payments every month. Furthermore, your employer pays you monthly, semi-monthly, or bi-weekly. In the following sections, we estimate the monthly, bi-weekly, and weekly amounts of your paycheck.
Budgeting for a Monthly Paycheck
Budgeting with a $97K annual gross salary requires breaking it down to monthly amounts.
Your employer will pay you one-twelfth of your annual salary each month. Yet, your employer will withhold the necessary taxes. The employer sends the taxes directly to the IRS.
Monthly withholdings on a $97,000 salary:
|Monthly Gross Income||$8,083|
|Social Security||– $501.17|
|Federal Income Tax||– $1,133.35|
|Monthly Take-Home Pay||$6,331.61|
Given you file taxes as a single, your monthly salary of $8,083 will result in take-home pay of $6,331.61.
Bi-Weekly Take-Home Pay
If your employer pays you every fortnight, there will be 26 paychecks in a year.
Here is an estimate of bi-weekly withholdings from your paycheck
|Bi-weekly Gross Income||$3,730.77|
|Social Security||– $231.31|
|Federal Income Tax||– $523.08|
|Bi-weekly Take-Home Pay||$2,922.28|
With a tax filing status of “single”, you can expect a net paycheck of $2,922.28 every fortnight.
Budgeting with bi-weekly income and monthly expenses has its own challenges 🔗. The simplest method is to assume you earn two paychecks a month and one extra paycheck. Best to apply the extra paycheck to savings.
Tax Withholdings with Weekly Payments
Some employers pay you weekly. This is very unusual for salaried employees and rare for wage earners.
This is the weekly breakdown of pay and withholdings
|Weekly Gross Income||$1,865.38|
|Social Security||– $115.65|
|Federal Income Tax||– $261.54|
|Weekly Take-Home Pay||$1,461.14|
Your weekly paycheck will amount to $1,461.14 if you earn $97K a year and are filing taxes as a single.
What is my Net Hourly Rate and Why do I Care?
Your net hourly rate is the amount of money you can effectively spend when you work one hour.
From your net hourly rate you can calculate the value of an expense in the hours (or minutes) you need to work for it. This makes it easier to be frugal with day-to-day expenses.🔗
Calculating the hourly rate from your net income, after taxes, is important because you can not avoid paying taxes.
With a $97,000 salary and taxes paid in Texas your net hourly rate is $36.53.
Is $97,000 a Good Salary in Texas?
An income of 97 thousand dollars annually or $8,083 monthly is 284.18% of a living wage in Texas. This is a good income for a single person with no children.
We compare the income against a Texas-wide average for the living wage. The living wage in different metro areas and counties can differ widely from this average.
Being a resident of Texas is great tax wise. You pay no income tax on your earned wages or salary.
From a salary of 97,000 dollars, you will keep $75,979 a year or $5,887.61 a month. This is a good income in Texas for a single without children or dependents.
However, you want to look at income levels and other expenses before deciding to find a job in Texas.
Does higher income push you into a higher tax bracket?
Suppose you get a raise or a better paying job. This will mean more income. Let’s look at the next $1,000 or the next 10K levels. That would mean you pay taxes on $98,000 or on an $100,000 annual income.
This article is not tax advice, nor should be taken as such. All calculations are estimates and for budgeting purposes only. The content of this article is only for learning and entertainment. The article does not replace professional tax advice.
In general, you have to consider your personal circumstances. Your taxable income may be reduced by exclusions, dependents, deductions, or other types of income. These and many other factors will influence the taxes you pay. To prepare your tax return you should consult with a tax professional. A CPA or other tax professional can give you individual advice on how to save on taxes.
We considered in this article only individual income tax. That means, we did not include information on capital gains taxes, taxes on business income, or self-employment taxes.
We used data for the tax year 2023 for our calculations.
We used the following references for our estimates: