Is $75,000 a Good Salary in Texas?

Whether a $75,000 salary is “good” in Texas depends on individual financial goals, lifestyle, and specific location. Evaluating a salary requires understanding its purchasing power relative to local costs and typical earnings. Texas has no state income tax and a diverse economy, influencing both cost of living and earning potential.

Understanding Cost of Living in Texas

The cost of living in Texas can vary significantly across its expansive geography, influencing how far a $75,000 salary might stretch. Housing is often the largest expense, with average apartment rents across the state ranging from approximately $1,200 to $2,000 per month. For those considering homeownership, the median home price in Texas was around $335,000 to $340,000.

Transportation expenses also constitute a notable portion of a household budget. Annual transportation costs in Texas can range from approximately $5,477 to $15,530. Full coverage car insurance averages around $2,400 to $2,700 per year.

When it comes to daily necessities, a single person might expect to spend between $280 and $365 monthly on groceries. Utility costs, including electricity, water, and gas, average between $377 and $460 per month across the state. Specifically, electricity bills can range from $165 to $215 monthly, while the average water bill is around $37 per month.

Healthcare expenses are another consideration, with average individual health insurance premiums estimated to be between $470 and $610 per month. Beyond direct expenses, the tax structure in Texas impacts disposable income. While the state does not levy a personal income tax, residents are still subject to federal income tax, Social Security, and Medicare taxes.

For a single individual earning $75,000 annually, after accounting for a standard deduction of $14,600, the federal income tax liability would be approximately $8,341. Additionally, Social Security tax is 6.2% of gross income, totaling $4,650 on a $75,000 salary, and Medicare tax is 1.45%, amounting to $1,087.50. Texas does have relatively high property taxes, with average effective rates typically falling between 1.6% and 1.8% of a property’s appraised value, which is higher than the national average.

Texas Salary Benchmarks

Understanding where a $75,000 salary stands requires comparing it to the broader income landscape in Texas. The median household income in Texas ranges from approximately $73,000 to $76,000. This figure provides a baseline for how a $75,000 salary compares to what half of Texas households earn.

The job market in Texas experienced robust growth, adding 284,200 jobs in 2024, representing a 2.0% increase. Forecasts predicted a 2.5% increase in jobs for 2024, indicating a dynamic employment environment. Key sectors contributing to this growth include:

Energy
Financial services
Construction
Professional and business services
Trade
Transportation
Utilities
Leisure and hospitality

While specific average salaries for every industry vary, a $75,000 salary generally places an individual within or above the median household income range for the state. Salary levels are often influenced by factors such as educational attainment, years of experience, and the specific demand within different industries. Texas’s expanding economy and diverse job opportunities mean that a $75,000 salary can be a competitive offering in many fields.

Budgeting and Lifestyle on $75,000

Earning $75,000 in Texas translates to a monthly gross income of $6,250. After federal income tax, Social Security, and Medicare deductions, the net monthly income for a single individual would be approximately $5,076. This net amount is what is available for all living expenses, savings, and discretionary spending.

A sample monthly budget for an individual might allocate around $1,200 to $2,000 for housing, whether rent or a mortgage payment. Transportation costs could consume $200 to $450, covering car insurance, fuel, and maintenance. Groceries for one person typically cost $280 to $365 monthly, while utilities could range from $377 to $460. Healthcare expenses, particularly insurance premiums, would be an additional $470 to $610 per month.

After covering these core expenses, a portion of the income remains for discretionary spending and savings. This could include funds for entertainment, dining out, personal care, and hobbies. The remaining amount allows for building an emergency fund, contributing to retirement accounts, or paying down debt, depending on individual financial priorities. A $75,000 salary generally supports a comfortable lifestyle in many parts of Texas, allowing for a balance between necessities and personal pursuits, along with opportunities for financial planning and saving.

Geographic Differences Within Texas

The purchasing power of a $75,000 salary in Texas is heavily influenced by where one chooses to live within the state. Major metropolitan areas, such as Austin, Dallas, Houston, and San Antonio, typically present a higher cost of living, especially concerning housing.

For instance, average rents in Austin can range from approximately $1,439 to $2,100 per month, and the median home price is around $436,000 to $440,000. Dallas sees average rents from about $1,416 to $2,000, with median home prices near $400,000. Houston offers slightly more affordable housing compared to Austin and Dallas, with average rents around $1,197 to $1,900 and median home prices between $325,000 and $370,000. San Antonio also provides a more economical option, with average rents ranging from $1,101 to $1,700 and median home prices around $302,000 to $306,000.

These urban centers often provide more job opportunities and amenities, but they come with increased housing costs and potentially longer commute times. Conversely, mid-sized cities and rural areas across Texas offer a significantly lower cost of living.

For example, Lubbock recorded a median home price as low as $195,000. Some smaller cities, like Mc Gregor, Hidalgo, and Alamo, have average rents ranging from $252 to $374 per month. While these areas can offer greater financial breathing room and a quieter lifestyle, they might have fewer job prospects or limited access to certain services and amenities found in larger cities. El Paso, though a larger city, is noted for property tax rates around 2.6%, which can impact overall housing affordability. The choice of location therefore involves a trade-off between cost, convenience, and lifestyle preferences.