California vs. Texas: Where Do You Actually Keep More Money in 2026?

The California vs. Texas debate has never been more relevant. With remote work allowing more flexibility in where we live, many Americans are asking: where will my money go further? Let's dive deep into the numbers.

The Tax Difference at a Glance

Texas: 0% state income tax California: Up to 13.3% state income tax (highest in the nation)

On paper, this seems like an easy win for Texas. But as we'll discover, the reality is more nuanced.

Real Numbers: $100,000 Salary Comparison

Let's compare the take-home pay for a single filer earning $100,000:

California ($100,000 salary)

Federal Tax: $14,768
California State Tax: $5,498
Social Security: $6,200
Medicare: $1,450
Annual Take-Home: $72,084
Monthly Take-Home: $6,007

Texas ($100,000 salary)

Federal Tax: $14,768
State Tax: $0
Social Security: $6,200
Medicare: $1,450
Annual Take-Home: $77,582
Monthly Take-Home: $6,465

Difference: $5,498/year or $458/month more in Texas

But Wait—Cost of Living Matters

The tax savings in Texas can be offset by other factors:

Property Taxes

California: Average effective rate of 0.71%
Texas: Average effective rate of 1.60%

On a $400,000 home:

California: $2,840/year
Texas: $6,400/year
Difference: $3,560 more in Texas

Housing Costs

Median home prices (2026):

Austin, TX: $545,000
Los Angeles, CA: $895,000
San Francisco, CA: $1,200,000
Houston, TX: $335,000
Dallas, TX: $415,000

Utilities

Texas has deregulated electricity, which can mean higher and more volatile utility bills, especially during extreme weather.

Quality of Life Factors

Beyond pure dollars, consider:

Climate

California offers mild weather year-round
Texas experiences extreme heat in summer (100°F+)

Job Market

California dominates in tech, entertainment, and biotech
Texas is strong in energy, aerospace, and increasingly tech

Public Services

California generally offers more robust public services
Higher state taxes fund better infrastructure and programs

The Verdict

For a $100,000 salary:

Pure tax savings: Texas wins by $5,498/year
After property tax adjustment: Texas advantage shrinks to ~$2,000/year
After cost of living: Depends heavily on the specific cities being compared

Best for Texas

High earners ($200K+) save the most on state income tax
Those buying homes in affordable Texas metros (Houston, San Antonio)
Remote workers with coastal California salaries

Best for California

Those who value mild climate and outdoor lifestyle
Workers in industries that pay significantly more in California
Renters in less expensive California metros

Use Our Calculator

See exactly how much you'd take home in each state: