Payroll for Houston Employers
Houston has no city payroll tax and Texas has no state income tax withholding, so payroll here is mostly federal withholding, Social Security, Medicare and federal unemployment tax, plus Texas Workforce Commission unemployment tax. That sounds simple until crews move between plants, hospitals run three shifts and restaurants pay tips across several locations. BOMCAS runs payroll for Houston employers remotely, handles the filings and keeps employee records ready for an audit or a claim.
TWC registration and federal deposits are covered on our Texas payroll page. Here we look at crews, shifts and tipped staff in Houston.
Turnaround Crews and Travelling Workers
Plant maintenance and turnaround contractors often bring in workers for a few weeks at a time, pay overtime heavily and provide per diem for meals and lodging. Per diem paid under an accountable plan, within federal rates and with substantiated travel away from home, is not wages. Per diem paid to workers who live locally, or paid without those rules, is taxable. We set up the plan, track which workers qualify and report it correctly on W-2s.
Work in Louisiana and Other States
Crews sent to plants in Lake Charles or across the Gulf Coast may become subject to Louisiana income tax withholding and unemployment rules once they work there. Each state has its own thresholds, and some require withholding from the first day. We register in the other state when needed and keep Texas and out-of-state wages separate.
Hospitals, Clinics and Shift Work
Medical employers deal with shift differentials, on-call pay, overtime for nurses and technicians and staff who work for more than one related entity. Overtime must include shift differentials and most bonuses in the regular rate. We also keep federal reporting for the overtime deduction available for 2025 through 2028, which affects how overtime pay is shown on W-2s.
Texas Workforce Commission
Employers register with TWC once they pay $1,500 in wages in a quarter or employ someone in 20 different weeks of a year. New employers start at 2.7 percent on the first $9,000 of each employee's wages, and the rate then reflects the company's own claims. Quarterly reports are due at the end of the month after each quarter. We file the reports, respond to benefit claim notices and protest claims that should not be charged to your account.
Restaurants and Tipped Staff
Houston restaurants pay tipped workers a cash wage of at least $2.13 an hour, with tips making up the rest of the $7.25 federal minimum. Tips must be reported each pay period, service charges are wages rather than tips, and federal law now lets workers deduct qualified tips for 2025 through 2028, which requires separate reporting. The employer's FICA tip credit can offset part of the cost.
Household Employers
Families in River Oaks, Memorial and the suburbs who employ nannies, housekeepers or caregivers owe TWC tax once they pay $1,000 in a quarter, and federal Social Security and Medicare once wages pass the annual threshold. We register the household, file Schedule H with the federal return and prepare W-2s.
What We Do Each Cycle
- Calculate pay, overtime, per diem and tips.
- Make federal deposits and file Forms 941 and 940.
- File TWC quarterly reports and respond to claims.
- Report new hires to the Attorney General within 20 days.
- Prepare W-2s and 1099s each January.
Houston Payroll Questions
Is there a Houston city payroll tax?
No. Houston has no local income or payroll tax, and Texas does not withhold state income tax.
Is per diem taxable for turnaround workers?
Not if it is paid under an accountable plan to workers travelling away from home, within federal rates. Otherwise it is wages.
Do we need to withhold Louisiana tax for crews working there?
Often yes. Louisiana and other states may require withholding once employees work there, so we review each assignment.
When does a family owe Texas unemployment tax on a nanny?
Once it pays $1,000 or more in cash wages for household work in a calendar quarter.
Talk to BOMCAS About Payroll in Houston
Pay runs post to the ledger, wages flow to the business return, owner pay is part of planning, missed deposits go through late filing, employees can have their own returns done, restaurants keep mixed beverage tax current, and Canadian hires raise cross-border issues. Statewide, we also cover business tax preparation, personal tax preparation, sales and use tax, bookkeeping, tax planning, back taxes and late filing and cross-border tax, all reachable from the Texas overview.
Tell BOMCAS about your Houston business or household and we will reply with next steps and what we need for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. Every Houston service is on the Houston overview. This page is general information, not advice for your situation.