Is $130k a Good Salary in Texas?

A good salary allows for comfortable living, saving, and discretionary spending without financial strain. Its adequacy depends on the cost of living, taxes, and comparison to broader average incomes. This assessment helps individuals understand their true purchasing power.

Understanding the Cost of Living in Texas

The cost of living in Texas varies significantly, though it generally remains below the national average. Housing represents a substantial portion of monthly expenses. Average rental costs across the state range from $1,257 to $1,931 per month as of mid-2025. The median home price in Texas was around $304,005 as of mid-2025.

Utility expenses, including electricity, water, internet, and gas, typically fall between $377 and $460 monthly. Grocery bills for an individual range from $276 to $289 per month, while a household might spend around $504 monthly on food.

Transportation costs include vehicle ownership and operation. Full coverage car insurance averages $2,505 to $3,508 annually, with maintenance costing around $792 per year. Gas prices were about $3.03 per gallon as of mid-2025.

Healthcare expenses in Texas are notably higher than in many other states. Individual health insurance premiums can average around $500 per month for those not covered by employer-sponsored plans. Other personal expenditures can amount to about $26,312 per year for an individual.

The Impact of Taxes on Your Income

Federal income tax obligations are consistent nationwide. A $130,000 taxable income in 2025 is subject to a progressive federal tax system, where different portions of income are taxed at varying rates.

All earners contribute to FICA (Federal Insurance Contributions Act) taxes, which fund Social Security and Medicare. For 2025, the Social Security tax is 6.2% on earnings up to $176,100, while the Medicare tax is 1.45% on all earnings. These mandatory federal deductions reduce a gross salary to a lower net income.

Texas does not impose a state income tax, allowing residents to retain a larger portion of their gross earnings. This advantage is partially offset by other state and local taxes. Texas has comparatively high property taxes, with an average effective rate ranging from 1.67% to 1.81% of a home’s assessed value.

Sales tax is another component of the overall tax burden. The state sales tax rate is 6.25%, and local sales taxes can add up to an additional 2%, resulting in an average combined sales tax rate of 8.2%. This tax applies to purchases of goods and services.

Comparing $130k to Texas Average Incomes

A $130,000 salary in Texas represents a significantly higher income compared to the state’s average earnings. The median household income in Texas was approximately $76,292 in 2023.

The per capita personal income in Texas was about $67,942 as of 2024. A $130,000 salary places an individual well within the higher income brackets in Texas. This indicates a strong financial position relative to the general population.

How Location within Texas Matters

The purchasing power of a $130,000 salary varies considerably depending on the specific city or region within Texas. Major metropolitan areas like Austin, Dallas-Fort Worth, and Houston generally have higher costs of living compared to smaller cities or rural parts of the state. Smaller cities like El Paso and Lubbock offer even lower costs.

Housing costs demonstrate significant regional differences. As of mid-2025, average rents for a one-bedroom apartment range from $1,427 in Austin and $1,410 in Dallas, to $1,194 in Houston and $1,095 in San Antonio. In more affordable cities, average one-bedroom rents drop to $965 in El Paso and $854 in Lubbock. Median home prices also reflect these disparities, with Austin’s median listing price around $579,900 and Lubbock’s at $240,000.

Beyond direct costs, quality of life, amenities, and job opportunities differ by location. Major cities offer broader job markets and diverse cultural attractions, but often have higher housing and traffic challenges. Smaller cities and rural areas may provide a quieter lifestyle and lower cost of living, but potentially fewer employment opportunities.

Budgeting and Lifestyle on $130k

A $130,000 salary in Texas generally positions an individual for a comfortable lifestyle, offering ample room for budgeting, saving, and discretionary spending. Creating a detailed budget is a practical step, often involving allocating specific percentages of net income to various expense categories.

A $130,000 salary offers considerable potential for building financial security. After covering essential expenses and taxes, individuals can prioritize contributions to savings and investments, including retirement accounts and an emergency fund. This allows for progress toward long-term goals and effective debt management.

The disposable income from a $130,000 salary allows for a wider range of discretionary spending and lifestyle choices, such as dining out, travel, and hobbies. The extent of this spending varies based on individual preferences and location within Texas. A $130,000 salary in Texas offers a strong foundation for financial well-being.