Hiring Your First Employee in Texas (2026)
The Texas-specific steps for a first W-2 hire, layered on top of the federal checklist. Every figure links to the state agency or official source we checked.
Minimum wage
$7.25/hour, the federal minimum. Texas has no higher state rate.
State unemployment tax (SUTA)
For 2026 the Texas Workforce Commission's entry-level rate is 2.70% for all industry groups, on the first $9,000 of each employee's wages.
Income tax withholding registration
Texas has no state personal income tax, so there's no state withholding account. You still register with the TWC for unemployment tax.
New-hire reporting
Report new hires and rehires to the Office of the Attorney General within 20 calendar days of the date they start earning wages.
Workers' compensation
Optional for most private employers. If you don't carry it (you're a "non-subscriber"), file DWC Form-005 with the Texas Department of Insurance within 30 days of hiring your first employee, and again every year between February 1 and April 30. You must also tell employees in writing and post the no-coverage notice.
Paid sick leave, family leave & disability
We found no Texas law requiring private employers to provide paid sick leave, and Texas has no state paid family leave or disability insurance program. Any leave you offer is set by your own policy, though federal FMLA applies once you have 50 or more employees.
Required posters
The TWC publishes the state posters it requires (for example, the Texas Payday Law and unemployment notices). If you don't carry workers' comp, you also post the TDI no-coverage notice. Federal posters apply too; the DOL FirstStep Poster Advisor shows which ones. Official posters are free.
Worked example: one full-time employee at $18/hour
This uses the same assumptions as our employee cost calculator: $18/hour, 40 hours a week, 52 weeks, 2026 federal rates, and Texas's new-employer SUTA rate. Workers' comp is a placeholder; your insurer's rate for the job class will differ.
| Wages: $18 × 40 h × 52 weeks | $37,440.00 |
| Social Security (6.2%) | $2,321.28 |
| Medicare (1.45%) | $542.88 |
| FUTA (0.6% of first $7,000) | $42.00 |
| TX unemployment: 2.7% of first $9,000 | $243.00 |
| Workers' comp, illustrative $1.00 per $100 of payroll | $374.40 |
| Total before benefits | $40,963.56 |
That's 1.09× wages, or about $19.69 per hour paid, before benefits, paid leave, and payroll software. $18/hour is above Texas's 2026 minimum wage.
FAQ
What is the Texas SUTA rate for new employers in 2026?
For 2026 the Texas Workforce Commission's entry-level rate is 2.70% for all industry groups, on the first $9,000 of each employee's wages.
Is workers' comp required for my first employee in Texas?
Optional for most private employers. If you don't carry it (you're a "non-subscriber"), file DWC Form-005 with the Texas Department of Insurance within 30 days of hiring your first employee, and again every year between February 1 and April 30. You must also tell employees in writing and post the no-coverage notice.