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A $120,000 offer in Austin and a $120,000 offer in San Francisco aren't worth the same. Federal tax is identical, but state income tax and state payroll contributions can differ by thousands of dollars a year. This article compares take-home pay across four common states for 2026 and shows how to work out the salary you'd need in a higher-tax state to break even. Figures come from our paycheck calculator.
Short answer
Federal income tax, Social Security and Medicare are the same in every state, so the difference between two offers comes from state income tax, local tax and state payroll contributions. For a single filer on $120,000, take-home pay is about $93,250 in Texas and $84,775 in California, a gap of $8,475 a year. To match the Texas offer, a California job would need to pay about $134,700.
Why the same salary pays differently by state
Every paycheck has three layers of tax:
- Federal income tax, Social Security and Medicare: identical everywhere for the same salary.
- State income tax: none in states such as Texas, Washington and Florida; up to double digits at high incomes in California and New York.
- Local and payroll taxes: New York City income tax, California SDI, Washington's paid family leave and WA Cares Fund, and others.
Take-home pay on $100,000 in five places
Single filer, 2026, no pre-tax deductions:
| Where you work and live | State and local income tax | State payroll contributions | Take-home pay (year) | Per month |
|---|---|---|---|---|
| Texas | $0 | $0 | $79,180 | $6,598 |
| Washington | $0 | $1,387 | $77,793 | $6,483 |
| New York (outside NYC) | $4,860 | $443 | $73,877 | $6,156 |
| California | $5,055 | $1,300 | $72,825 | $6,069 |
| New York City | $8,301 | $443 | $70,436 | $5,870 |
Federal income tax ($13,170 at this salary), Social Security and Medicare are the same in every row.
Worked comparison: Texas vs California at $120,000
| Texas | California | |
|---|---|---|
| Federal income tax | $17,570 | $17,570 |
| Social Security and Medicare | $9,180 | $9,180 |
| State income tax | $0 | $6,915 |
| California SDI (1.3%) | $0 | $1,560 |
| Take-home pay | $93,250 | $84,775 |
| Per month | $7,771 | $7,065 |
The California offer takes home $8,475 less a year, about $706 a month. To match the Texas take-home, the California salary would need to be about $134,700, roughly 12% higher.
Our California figures use the Franchise Tax Board's latest published rate schedules until the 2026 schedules are released.
How to compare two offers
- Run each salary through the right state. Use the paycheck calculator or the state pages, such as California, Texas, New York and Washington.
- Include pre-tax deductions you'll actually make, such as 401(k) and health insurance; they save more tax in higher-tax states.
- Compare monthly take-home, then subtract the big costs that differ by location: rent, transport and childcare.
- Add the benefits: employer 401(k) match, health insurance premiums, bonuses and equity.
- Work out the break-even salary in the higher-tax state by raising its salary until take-home pay matches.
Living in one state and working in another
Remote and hybrid jobs make this common. In general, the state where you work can tax the wages earned there, and your home state taxes all your income but gives a credit for tax paid to the other state, so you don't pay twice on the same dollars. Some neighbouring states have agreements that simplify this, and some, including New York, can tax remote employees of employers based there. Check both states' rules, or ask a tax professional, before you accept.
Beyond tax: cost of living
A lower-tax state isn't automatically better. The $8,475 a year between the Texas and California offers above is about $706 a month, which a difference in rent can easily outweigh in either direction. Treat take-home pay as the starting point, then compare what it buys where you'll live.
Sources
Frequently asked questions
How much more do I need to earn in California to match a Texas salary?
For a single filer, a $120,000 salary in Texas takes home about $93,250 a year. To take home the same in California you'd need about $134,700, roughly 12% more, because of California income tax and 1.3% SDI.
Which states have no state income tax?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don't tax wages. Some still charge employee payroll contributions; Washington, for example, has paid family leave and the WA Cares Fund.
If I live in one state and work in another, which state taxes me?
Usually the state where you work taxes the wages earned there, and your home state taxes all your income but gives a credit for tax paid to the other state. Some states have agreements or special rules, so check both states' rules before accepting.
Is take-home pay the only thing to compare?
No. Housing, transport and other living costs often differ more than taxes do, and benefits such as health insurance and 401(k) matching vary by employer. Compare take-home pay first, then what it buys in each place.
The CountYourTax team
We build free tax and salary calculators and check the rates against official government sources. See how we check our numbers.
General information, not tax advice. Please consult a qualified tax professional before filing or making financial decisions. Report an error in this article