Payroll Near Fort Hood
Killeen employers include federal contractors, restaurants, retailers and builders, many of whom hire military spouses, veterans and reservists. BOMCAS runs payroll for Killeen employers remotely.
Federal and TWC basics are on the Texas payroll page. Here we cover contract wages, reservists and spouses in Killeen.
Service Contract Act Wages
Contractors providing services on federal contracts pay at least the wage rates and fringe benefits set by the Department of Labor's wage determination for each job. The health and welfare fringe can be paid as benefits or as cash in addition to wages. Cash fringe is taxable wages. Payroll must track hours by contract to support certified payroll and audits.
Military Spouses
Spouses who move often may claim a state of residence other than Texas. Texas has no state income tax, so it does not affect Killeen payroll. Employers of remote spouses in other states may need to register and withhold there.
Reservists and Guard Members
Employers must give employees leave for military service and reemploy them under federal law. Some employers pay differential wages during active duty, which are taxable wages subject to income tax withholding but not Social Security or Medicare.
Restaurants and Tips
Restaurants may pay tipped staff $2.13 an hour in cash wages if tips raise earnings to $7.25. Tips are reported through payroll, and employers may claim the FICA tip credit.
Veterans
The federal work opportunity tax credit for hiring certain veterans does not apply to anyone who began work after December 31, 2025, and the IRS has retired Form 8850. Employers can still claim credits already earned for veterans hired before 2026, including amounts carried forward, and we watch for any renewal by Congress before new hires are planned around it.
Contract Changeovers
When a new contractor takes over a service contract, it must pay at least the wages and fringe benefits in the predecessor's collective bargaining agreement where one applied. Rehired workers bring prior service that can affect vacation under the wage determination. Payroll must be set up quickly with the right rates, benefits and leave balances so the first pay run is correct.
Paid Leave and Holidays
Wage determinations specify vacation and holidays. Employers must track leave accruals, pay holidays at the required rate and record leave pay correctly in payroll.
TWC
Employers register with TWC, file quarterly reports and pay unemployment tax. Spouses who quit to follow a soldier to a new assignment may qualify for benefits, so employers should answer TWC claim notices promptly and accurately with the reason for leaving.
Hiring Veterans and Transitioning Soldiers
Soldiers leaving the Army through skills programmes sometimes work for employers on internships before separation. They are still paid by the Army during the programme, so the employer usually does not run payroll for them until they are hired after separation.
Security Clearances and Remote Staff
Contractors with staff who work at other installations or from home in other states must withhold for those states and register for unemployment tax where the work is done. We keep a record of each employee's work location and update state accounts when people move.
Year-End
W-2s are due January 31, along with 1099-NECs to contractors paid $2,000 or more in 2026.
Deployment and Leave Without Pay
Civilian employees of contractors who are called up as reservists keep their benefits under federal law. Payroll records health coverage elections and leave status during the absence.
What We Handle
- Payroll runs and deposits.
- Wage determinations and fringe.
- Differential pay.
- Tip reporting.
- Credits carried from earlier hires.
- TWC and year-end filings.
Killeen Payroll Questions
Is cash fringe under the Service Contract Act taxable?
Yes, as wages.
Is differential pay for reservists subject to FICA?
No, but it is subject to income tax withholding.
Can we still claim a credit for hiring veterans?
Not for veterans who began work after 2025, unless Congress renews the work opportunity credit.
Does Texas have state withholding?
No.
Talk to BOMCAS About Payroll in Killeen
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, restaurants file sales tax and staff abroad raise cross-border questions. Our Texas pages explain the statewide rules on business tax, personal returns, sales and use tax, bookkeeping, tax planning, back taxes and cross-border tax, all reachable from the Texas overview.
Whether you are sorting out a house after new orders, a spouse business that moved with you or a contract that needs cleaner books, send BOMCAS a short note. We will say what we would review first and what a quote depends on. Write through the contact page or the form below, phone 780-667-5250 or email info@bomcas.ca. Every Killeen service links back to the Killeen overview. Nothing here is advice for your particular case; it is general information.