Texas Payroll Compliance Guide for 2025: What Employers Must Know

By U.S. Tax Bay — Your Partner in Multistate Payroll & Tax Compliance

Texas remains a popular choice for business expansion due to its business-friendly tax structure, but employers must still comply with state-level payroll regulations—especially when hiring new employees or growing operations.

🔍 What’s Unique About Payroll in Texas?

While Texas does not have a personal income tax, employers are still required to comply with critical payroll regulations, particularly unemployment insurance and proper wage classification.

🔹 1. Texas Unemployment Tax (SUTA) – 2025 Updates

Every employer in Texas must register with the Texas Workforce Commission (TWC) and pay State Unemployment Tax (SUTA) if they:

• Pay $1,500 or more in wages in a calendar quarter, or

• Have at least one employee working 20+ weeks in a calendar year

📌 2025 Rate Highlights:

• Minimum tax rate: 0.23%

• Maximum tax rate: 6.23%

• Taxable wage base: $9,000 per employee

Make sure to review your annual rate notice and update your payroll system accordingly.

🔹 2. Wage and Labor Law Compliance

Although Texas does not mandate paid family leave, employers must still comply with:

• Texas Payday Law – timely wage payments and transparent pay schedules

• Fair Labor Standards Act (FLSA) requirements for overtime and exempt classification

• New Hire Reporting – report all new employees within 20 days

Failing to meet these requirements may result in penalties or legal actions by the Texas Workforce Commission or U.S. Department of Labor.

🧾 Who Needs to Register?

Any business with employees in Texas must:

• Obtain a Federal EIN

• Register with the Texas Workforce Commission for SUTA

• Report new hires and maintain wage records

Even if your payroll is run on ADP, Gusto, QuickBooks, or Zenefits, proper registration and setup are essential to avoid compliance issues.

✅ Let U.S. Tax Bay Handle Your Texas Payroll Compliance

From new business registration to tax account setup and filings, U.S. Tax Bay offers:

✔️ Texas Workforce Commission (TWC) registration

✔️ SUTA tax filings & rate updates

✔️ New Hire Reporting & Audit Support

✔️ Platform integration with ADP, Gusto, QuickBooks & More

✔️ Full-service multistate payroll tax support

📞 Hiring in Texas? We’ve Got You Covered.

Focus on running your business while U.S. Tax Bay ensures your payroll is 100% compliant in the Lone Star State.

👉 Visit www.ustaxbay.com or contact info@ustaxbay.com to get started.