Does a locum tenens physician pay state income tax in Texas?

No. Texas levies no individual income tax, so the state line on a Texas locum contract is zero. On a $336,000 contract year the total tax bill is $108,025 — $32,869 of self-employment tax and $75,156 of federal income tax — leaving $227,975, or 67.8% of the headline rate. That is the highest retained share available to a locum in any state.

How much more does a locum keep in Texas than in California?

$25,521 a year on an identical $336,000 contract — $227,975 in Texas against $202,454 in California. Per hour worked that is $135.70 against $120.51. The entire gap is the state income tax line; the federal and self-employment tax figures are identical in both states.

Does Texas tax an S-corp or LLC formed by a locum physician?

Texas imposes a franchise tax, often called the margin tax, on entities with revenue above the no-tax-due threshold, and requires an annual report from the entity whether or not any tax is owed. There is no individual income tax, so an S-corp election in Texas is not clawed back at the state level the way it is in California or New York — but the filing obligation still exists and is easy to miss.

Locum tenens take-home pay in Texas, 2026

Texas levies no individual income tax, so a locum keeps 67.8% of the headline rate — the highest retained share in the country. On a $336,000 contract year that is $25,521 more than the identical contract worked in California. This page shows the whole calculation, and then the two things that are genuinely worth knowing before you treat "no income tax" as the end of the analysis.

Figures below are produced by the same take-home calculator you can run yourself, with the inputs stated. Tax data last reviewed 3 August 2026.

The number, on a standard contract

MD/DO, $1,600 a day, 5 days a week, 42 weeks a year, single filer, no business expenses claimed:

Take-home on a $336,000 locum contract in Texas
Line	Amount
Gross contract receipts	$336,000
Self-employment tax	−$32,869
Federal income tax	−$75,156
Texas income tax	$0
Total tax	−$108,025
Cash you keep	$227,975
Share of the headline rate you keep	67.8%
Effective hourly, after everything	$135.70

The contract advertises $200 an hour and pays $135.70 after tax. That is as good as the arithmetic gets for a 1099 locum anywhere in the United States, and it is worth being precise about why: nothing clever is happening. Self-employment tax and federal tax are unchanged. Texas simply does not add a third layer.

What no income tax does not mean

Two things get conflated here, and both cost people money.

It does not reduce your federal or self-employment tax

$108,025 still leaves on a $336,000 contract — 32.2% of gross, before a single business expense. A locum who treats a Texas assignment as low-tax and skips quarterly estimates is in exactly the same trouble as one in California. Quarterly estimated taxes →

It does not mean an entity is free

Texas imposes a franchise tax — the "margin tax" — on entities with revenue above the no-tax-due threshold, and requires an annual report from the entity whether or not any tax is owed. Miss the report and the entity's right to transact business can be forfeited. That is an administrative trap rather than a large bill, but it is the one Texas-specific obligation an out-of-state locum forming a PLLC tends not to know about.

Where Texas genuinely helps an S-corp

With no individual income tax, Texas does not claw back the federal saving from an S-corp election the way California's 1.5% entity tax or New York City's refusal to recognise S-corp status do. If the election makes sense on the federal arithmetic, Texas is one of the states where it survives contact with the state code. The full S-corp analysis →

Texas against the states locums actually compare it to

Identical $336,000 contract, identical assumptions, only the state changed:

Take-home comparison across Texas, New York and California
State	State tax	Cash you keep	Effective hourly
Texas	$0	$227,975	$135.70
New York	−$18,762	$209,213	$124.53
California	−$25,521	$202,454	$120.51

Read that in the direction that is useful when negotiating: a California assignment must pay $15.19 an hour more, and a New York one $11.17 an hour more, to leave you where a Texas assignment already leaves you. On a 13-week 40-hour contract that is about $7,900 and $5,800 of rate respectively.

This page models tax only. Cost of living, licensure, malpractice pricing and assignment availability are separate questions, and a Texas contract is not automatically the better job. All fifty states ranked after tax →

Run your own Texas numbers

Your rate, your weeks, your expenses, your filing status.

Open the calculator with Texas selected

Also worth reading before a Texas assignment

Deductible business expenses — with no state tax to reduce, federal deductions are the only lever left, which makes them worth more here, not less.
Malpractice and tail coverage — who buys the tail is a contract question, not a state one.
Solo 401(k) vs SEP-IRA — the largest remaining federal deduction available to a high-earning 1099 locum.

Estimate only. This page models federal and self-employment tax for a single filer and does not model itemised deductions, tax credits, the Texas franchise tax on an entity, or any local levy. LocumPayLab is an independent educational resource and not a tax adviser. Verify your position with a CPA or enrolled agent who works with independent physicians.

Sources

Internal Revenue Service, Revenue Procedure 2025-32 — 2026 federal brackets and standard deduction.
Social Security Administration, 2026 COLA fact sheet — Social Security contribution and benefit base.
Internal Revenue Service, Self-Employment Tax — IRC § 1401 and § 1402 treatment.
Tax Foundation, 2026 State Income Tax Rates and Brackets, compiled from state revenue department schedules.