Payroll for a College Town
Denton employers hire many students, along with full-time staff in plants, offices and restaurants. Every employer withholds federal income tax and pays Social Security, Medicare and unemployment taxes, with no state income tax. BOMCAS runs payroll for Denton employers remotely.
The Texas payroll page covers TWC and federal basics, while this page deals with students, tips and bands in Denton.
Student Employees
Students working for private businesses are regular employees, subject to withholding, Social Security and Medicare. The student exemption from Social Security and Medicare applies only when a student works for the school where they are enrolled. Students who expect no tax liability can claim exemption from withholding on Form W-4.
International Students
Students on F-1 visas working on campus or under practical training are generally exempt from Social Security and Medicare for their first five calendar years in the United States, while they are nonresidents. Employers withhold income tax under special rules for nonresident aliens and may apply treaty benefits when the student provides Form 8233.
Bars, Restaurants and Tips
Bars and restaurants may pay tipped staff $2.13 an hour in cash wages if tips bring them to at least $7.25. Card tips and cash tips are reported on payroll, and employers may claim the FICA tip credit. Qualified tips are reported separately from 2025 so workers can claim the new deduction.
Musicians and Sound Crews
Venues usually pay bands as independent contractors, reported on Form 1099-NEC when payments reach $2,000 in a year from 2026. Sound engineers, door staff and bartenders who work regular shifts under the venue's direction are usually employees.
Plant and Shift Work
Manufacturers pay overtime after 40 hours, with shift differentials and bonuses included in the regular rate. Qualified overtime is reported separately.
Summer and Semester Hiring
Employers near campus hire heavily in August and lose staff in May. New hires must complete Form I-9 within three business days and be reported to the state new hire registry within 20 days. Final pay for students who quit is due by the next regular payday.
Paying Musicians as Employees
Restaurants and bars with a resident band or regular performers who are told when and how to play may have to treat them as employees. Music schools and lesson studios that set teachers' schedules, rates and methods usually also have employees, not contractors.
Housing and Meals
Meals given to restaurant staff on shift for the employer's convenience can be excluded from wages. Cash meal allowances and housing provided to managers are usually taxable.
TWC
Employers register with TWC, file quarterly wage reports and pay unemployment tax. Students who work part time during the school year and leave in summer may affect claims.
Graduate Assistants at Private Employers
Private research firms and labs that hire graduate students as interns pay them as employees, with full withholding and FICA, unless the student is a nonresident in an exempt year. Stipends paid to interns who do real work for the business are wages.
Year-End
W-2s and 1099-NECs are due January 31. Employers of nonresident students may also issue Form 1042-S for treaty-exempt wages.
What We Handle
- Payroll runs and deposits.
- Student and international employee setup.
- Tip reporting and tip credit.
- Contractor payments to bands.
- Overtime calculations.
- TWC and year-end filings.
Denton Payroll Questions
Do student employees pay Social Security?
Yes, when working for a private business.
Are F-1 students exempt from FICA?
Generally yes for their first five calendar years while nonresident.
Are bands employees of the venue?
Usually not; they are paid as contractors.
Does Texas have state withholding?
No.
Talk to BOMCAS About Payroll in Denton
Payroll posts to the books and the business return, and owner pay is part of planning. Missed deposits are fixed through back taxes, staff may want personal returns, bars also file mixed beverage taxes and international students raise cross-border questions. You can read the statewide Texas rules on business returns, personal tax, sales tax, bookkeeping, planning, late filing and cross-border tax on our state pages, linked from the Texas overview.
Running a venue off the Square, renting houses near campus or filing as an international student for the first time? Drop BOMCAS a line about it and we will let you know what we would look at first and what a quote would need. You can reach us on the contact page or the form below, by calling 780-667-5250 or by emailing info@bomcas.ca. Each Denton service is linked from the Denton overview. The information here is general and is not advice for your own situation.