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REMOTE EMPLOYEES

Hiring a remote employee in Texas

Your company is in another state and one employee lives and works from home in Texas. Which state's taxes apply, unemployment, paid leave and Texas's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Texas at a glance

Income tax
No income tax on wages
Unemployment
$9,000 wage base, 2.7% new employer
Paid leave
None
New hire report
Within 20 days

Which state's taxes apply

Work state
Texas has no income tax on wages, so nothing is withheld for Texas.Source: Texas Constitution, Art. VIII, Sec. 24-a, Individual Income Tax Prohibited (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Texas for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

No state income tax withholding: neither state taxes these wages.

No New York withholding: the employee does no work in New York.

Unemployment

Texas: the employee works from home there, so the work is localized in Texas.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Texas, so the work is localized in Texas: pay Texas unemployment tax, not your company state's.

Agency
Texas Workforce Commission (Unemployment Tax)Source: Texas Workforce Commission, Unemployment Insurance Tax Rates (opens in a new tab), checked October 5, 2026
Wage base
$9,000 Fixed by lawSource: Texas Workforce Commission, Unemployment Insurance Tax Rates (opens in a new tab), checked October 5, 2026
New employer rate
2.7% 2.7%, or the employer's industry (NAICS major group) average rate if higher; for 2026 it is 2.7% for every group Surcharges includedSource: Texas Workforce Commission, Unemployment Insurance Tax Rates (opens in a new tab), checked October 5, 2026

Open the account: Texas payroll tax registration

Texas has no paid leave program funded through payroll.

Texas employer rules

Employment law applies where the employee works, so these follow the employee into Texas.

Final pay
Fired: Within 6 calendar days of discharge Quit: Next regularly scheduled paydaySource: Texas Labor Code 61.014, Payment After Termination of Employment (opens in a new tab), checked October 5, 2026
Pay frequency
At least twice a month for employees not exempt from FLSA overtime, with pay periods of nearly equal days; at least monthly for exempt employees. Paydays default to the 1st and 15th if none are designated.Source: Texas Labor Code 61.011, Paydays (opens in a new tab), checked October 5, 2026
Pay notice
No written wage notice at hire. Employers must post paydays in the workplace (Labor Code 61.012(c)), give a signed earnings statement each pay period (62.003), and tell new employees whether they have workers' comp coverage (406.005).Source: Texas Labor Code 61.012, Designation of Paydays; Notice (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the start date.Source: Office of the Attorney General of Texas, New Hire Reporting (opens in a new tab), checked October 5, 2026
E-Verify
Contractors and subcontractors on TxDOT highway construction, maintenance or improvement contracts must register with and use E-Verify for the term of the contract. State agencies must use it for all new employees. No general private-employer mandate.Source: Texas Transportation Code 223.051, Verification by Contractors (opens in a new tab), checked October 5, 2026
Sick leave
No state sick leave law.Source: Texas Labor Code 1.005, Preemption (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Texas, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Texas

WORKLIO HCM

Payroll for employees who work from home in another state

We help open state accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Worklio HCM calculates, deposits and files your payroll taxes in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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