Texas vs Washington: Taxes & Take-Home Pay 2026

Seattle or Austin: both skip the income tax

Neither Texas nor Washington taxes wages, so the paycheck gap comes down to Washington's payroll premiums: 0.81% for Paid Family and Medical Leave and 0.58% for WA Cares. On most salaries that is around 1.39% of pay. Texas has neither.

This pair is the classic tech-worker comparison, between Seattle and Redmond on one side and Austin, Dallas and Houston on the other, plus remote workers choosing a no-income-tax base. Beyond the paycheck, the real differences are Washington's capital gains tax, sales tax rates, and Texas's heavy property taxes.

What Washington takes from a paycheck

On a $180,000 salary, a Washington employee pays $1,453 for PFML and $1,044 for WA Cares, $2,497 in total. The PFML premium stops at $184,500 of wages (the Social Security wage base); WA Cares has no cap, so it keeps growing with income.

Some workers are exempt from WA Cares, for example those who obtained an approved exemption with private long-term care coverage. Our calculator assumes no exemption.

Washington payroll premiums at different salaries

Because the PFML premium is capped and WA Cares is not, Washington's payroll cost rises in a straight line until $184,500 and then more slowly. Texas employees pay neither, so every figure below is the annual Washington-only cost.

Washington's capital gains tax: the hidden difference for tech workers

Washington taxes long-term capital gains at 7%, and at 9.9% on the portion of gains over $1 million, above an annual standard deduction of $278,000 (2025). Real estate, assets held in retirement accounts and certain business assets are exempt. Texas has no capital gains tax.

Example: a Seattle engineer sells long-held company stock for a $400,000 long-term gain in a year with no other gains. The taxable amount is $122,000 after the 2025 deduction, and the Washington tax is about $8,540. The same sale in Texas owes only federal tax. Payments are typically due April 15. Anyone with a large concentrated stock position should check the timing of a move against when they plan to sell.

Sales tax and property tax

Washington's average combined sales tax is 9.57% and can reach 10.70%; Texas averages 8.20% and cannot exceed 8.25%. On $40,000 of taxable spending a year, that is roughly $548 more in Washington. Residents of both states can deduct sales tax instead of income tax if they itemize, within the $40,400 SALT cap for 2026.

Property tax runs the other way. Texas's effective property tax rates are among the highest in the country, while Washington's are moderate. Texas school districts must exempt $140,000 of a homestead's value (plus $60,000 for owners 65 or older or disabled), but local rates on the rest can still produce a bill well above what the same house would cost in Washington. For a homeowner, this usually outweighs Washington's payroll premiums.

Retirees

Neither state taxes Social Security, pensions or IRA withdrawals. Washington's capital gains tax exempts assets in retirement accounts and real estate, so it touches only retirees with large taxable brokerage gains above the deduction. Retirees no longer pay PFML or WA Cares once they stop earning wages.

For retirees the bigger question is property tax. Texas offers the extra school-tax exemption at 65, but a retiree with a large house may still pay more each year in Texas than in Washington.

Moving between Texas and Washington

There is no state income tax return to file when you move either way. If you realise large capital gains the year you move, Washington's capital gains tax applies to Washington residents, so the date residency changes matters. Keep records of the move date, lease or sale documents, and where you were living when trades settled.

Moving to Washington, expect PFML and WA Cares deductions to start with your first Washington paycheck. Moving to Texas, they stop, and if you buy a home, file the homestead exemption application with the county appraisal district.