What hourly rate does a Texas freelancer need in 2026?
Hourly rate needed in Texas by take-home pay
30 billable hours a week, 4 weeks off, $500 a month of business expenses, no health insurance or retirement savings, tax year 2026.
| Take-home pay | Single | Married filing jointly | Tax share (single) |
|---|---|---|---|
| $50,000 | $48/hr | $47/hr | 18.4% |
| $75,000 | $71/hr | $69/hr | 20.8% |
| $100,000 | $96/hr | $92/hr | 23.3% |
| $150,000 | $147/hr | $138/hr | 25.8% |
| $200,000 | $200/hr | $182/hr | 28.3% |
Texas income tax for freelancers in 2026
Texas has no personal income tax on wages or self-employment income in 2026.
Texas does not levy a personal income tax on wages or self-employment income. Freelancers there pay federal income tax and the 15.3% self-employment tax only.
How the calculator handles Texas
- Texas has no personal income tax, so self-employment income is subject only to federal income and self-employment tax.
- A Texas LLC (including a single-member LLC taxed as a sole proprietorship) is a taxable entity for the franchise tax, but owes no tax when annualized total revenue is at or below the no-tax-due threshold ($2,650,000 for 2026 and 2027 reports); it must still file a Public Information Report or Ownership Information Report each year by May 15. Sole proprietors without an LLC are not subject.
Local income taxes in Texas
Texas cities and counties do not levy a local income tax.
Texas estimated tax payments
- Who must pay: Not required. Not applicable: no state personal income tax.
- Safe harbor: Not applicable.
- Form: None
Federal estimated payments follow their own schedule. Work them out with the quarterly estimated tax calculator.
Business costs for a Texas freelancer
| LLC formation fee | $300 Certificate of Formation (Form 205, Texas Secretary of State). |
|---|---|
| Annual report | None with the Secretary of State. LLCs must file a free franchise tax Public Information Report (or Ownership Information Report) with the Comptroller every year by May 15. |
| Franchise or minimum tax | Franchise tax applies to LLCs (including single-member LLCs) but no tax is due if annualized total revenue is at or below $2,650,000 (2026 and 2027 reports); above that, 0.75% of taxable margin (0.375% for retail/wholesale). No minimum tax. Sole proprietorships are not subject. |
| Gross receipts tax | None for a typical freelancer below the franchise tax threshold (the Texas franchise tax is a margin tax that only applies to LLCs above $2,650,000 in revenue). |
You don’t need an LLC to freelance as a sole proprietor. Compare the tax treatment in LLC vs sole proprietor for freelancers.
What else a Texas freelancer deals with
Franchise tax reaches LLCs, not unincorporated sole proprietors
The Texas Comptroller states that a sole proprietorship not legally organized to limit its liability is not a taxable entity, while a single-member LLC filing as a sole proprietor for federal income tax purposes is a taxable entity. For 2026 and 2027 reports, the Comptroller lists a no-tax-due threshold of $2,650,000 in annualized total revenue, a 0.75% rate for most businesses (0.375% for retail or wholesale), and a 0.331% EZ Computation rate for revenue up to $20 million. (source 1, source 2)
Information report still due May 15, even with no tax due
The Comptroller discontinued the No Tax Due Report (Form 05-163) starting with the 2024 report year. An LLC at or below the no-tax-due threshold still files a Public Information Report (Form 05-102). The Comptroller says this report is due even when the entity does not have to file a franchise tax report. The annual report is due May 15, and a due date that falls on a weekend or holiday moves to the next business day. (source 1, source 2, source 3)
Data processing and information services are taxed on 80% of the charge
Comptroller Publication 96-259 (revised 01/2026) lists 16 taxable service categories under Tax Code Section 151.0101, including data processing and information services. Twenty percent of the charge for these services is exempt, so sales tax applies to the other 80%. Publication 94-127 lists creating web pages and providing server space as data processing. If taxable services make up more than 5% of a fee, the whole charge is taxable unless the taxable and nontaxable parts are billed separately. (source 1, source 2, source 3)
Sales tax permit: no fee, but required for taxable sales
According to the Comptroller's sales tax FAQ, an individual or entity doing business in Texas needs a sales and use tax permit to sell taxable services or tangible goods in Texas. There is no fee for the permit, although a security bond may be required. The state rate is 6.25%, and local jurisdictions can add up to 2%, for a combined maximum of 8.25%. Publication 96-259 also names photography and printing as examples of taxable labor. (source 1, source 2, source 3)
Business personal property: $125,000 exemption starting 2026
The Comptroller reports that on Nov. 4, 2025, voters approved a $125,000 exemption for tangible personal property held or used to produce income. Property worth $125,000 or less in a taxing unit is exempt in that unit. House Bill 9 (89th Legislature) lets an owner who believes the property is under the exemption amount elect not to render by filing a certifying statement. Renditions are generally due April 15 and can be extended to May 15 on written request. (source 1, source 2, source 3)
Assumed name (DBA): county clerk or Secretary of State
According to the Texas Secretary of State, a sole proprietor using a name other than their surname files an assumed name certificate with the county clerk in each county where the business keeps an office. The county clerk sets the fee. Since a 2019 law change, LLCs and corporations file only with the Secretary of State, which charges $25 per certificate. A certificate can cover a term of up to 10 years. To keep using the name after that, a new certificate must be filed. (source 1, source 2)
Frequently asked questions
Does Texas have a state income tax on freelance income?
No. Texas does not tax wage or self-employment income, so freelancers there pay federal income tax and self-employment tax only. Business taxes can still apply: None for a typical freelancer below the franchise tax threshold (the Texas franchise tax is a margin tax that only applies to LLCs above $2,650,000 in revenue).
Do freelancers in Texas pay state estimated taxes?
No. Texas does not require state income tax estimated payments. Not applicable: no state personal income tax.
Sources for Texas figures
Verified October 22, 2026 against official Texas and IRS publications.
- Franchise Tax - Texas Comptroller of Public Accounts
- Franchise Tax Overview (Publication 98-806) - Texas Comptroller
- Taxable Entities - Franchise Tax Frequently Asked Questions - Texas Comptroller
- Texas is open for small business (Fiscal Notes 2025) - Texas Comptroller
- Form 205 Instructions, Certificate of Formation - Limited Liability Company - Texas Secretary of State
- No Tax Due Reporting for Report Year 2024 and Later - Texas Comptroller of Public Accounts
- Texas Franchise Tax Public Information Report and Ownership Information Report - Texas Comptroller of Public Accounts
- Due Dates for Taxes, Fees and Information Reports - Texas Comptroller of Public Accounts
- Taxable Services (Publication 96-259) - Texas Comptroller of Public Accounts
- Data Processing Services are Taxable (Publication 94-127) - Texas Comptroller of Public Accounts
- Information Services (Publication 94-109) - Texas Comptroller of Public Accounts
- Texas Sales and Use Tax Frequently Asked Questions: Permits - Texas Comptroller of Public Accounts
- Sales and Use Tax - Texas Comptroller of Public Accounts
- Property Tax Today, January 2026 - Texas Comptroller of Public Accounts
- Valuing Property - Texas Comptroller of Public Accounts
- H.B. No. 9, 89th Legislature (Enrolled) - Texas Legislature Online
- Name Filings FAQs - Texas Secretary of State
- Selecting a Business Structure - Texas Secretary of State
Estimates for educational and planning purposes only. HourFloor does not provide tax, legal or financial advice. Verify your numbers with a qualified tax professional.