Texas Payday Law: Final Pay Deadlines and Unpaid Remedies

Under the Texas final paycheck law after termination, the deadline depends on how the job ended. If your employer fired, laid off, or discharged you, all unpaid wages are due within six calendar days of the discharge date. If you quit, resigned, or retired, your final pay is due on the next regularly scheduled payday. Both rules come from Chapter 61 of the Texas Labor Code, the Texas Payday Law, and they’re enforced by the Texas Workforce Commission (TWC).¹

The Two Deadlines

The six-day clock for a discharged employee runs in calendar days, not business days. Fired on a Wednesday means paid by the following Tuesday, even if a weekend or holiday falls in between. There is no grace period built in for payroll cycles: if the deadline arrives, the wages are due.

For a resignation, the “next regularly scheduled payday” is the payday you would have hit if you had stayed. If that payday falls on a day you’re not there, your employer has to pay you on another regular business day through the same method it normally uses, whether that’s direct deposit or a mailed check.¹

Neither deadline changes because you owe the company money, because equipment hasn’t been returned, or because paperwork is unfinished. Those are separate issues, addressed below.

What “Paid in Full” Has to Include

p>Your final paycheck covers every dollar of earned wages: your final hours worked, any earned commissions, and any payouts your employer has promised in a written policy or agreement.

Commissions and Bonuses

Commissions and bonuses fall within the Texas Payday Law’s definition of wages, and their timing follows the terms you and your employer agreed to.² If you fully earned a commission or bonus before your separation date, it belongs in your final pay. Many commission plans, though, condition payout on active employment at the payout date or on the customer actually paying. Courts have enforced those conditions when they’re clearly written. Vague or inconsistently applied policies work against the employer, and the TWC tends to rule against employers who change the terms after the fact or never put the conditions in writing.

Vacation, Sick Leave, and Severance

Texas does not require employers to pay out unused vacation, holiday, sick leave, parental leave, or severance. Those amounts are owed only if the employer promised them in a written policy or written agreement.¹ If there is no written policy, nothing is owed for unused leave.³

When there is a policy, its exact wording controls. Some cap the hours paid out, some require a minimum notice period before resignation to qualify, and some pay out only on involuntary separations. Read the handbook language before your last day; in a dispute, the TWC will hold the employer to whatever it put in writing.

Severance works the same way. Texas law does not require it, but if a contract or policy promises it, that amount is legally owed wages. Severance tied to a separation agreement is a negotiated term, and you should review what you’re giving up (often the right to sue) before signing.

What Your Employer Can Deduct

Under Section 61.018 of the Labor Code, deductions from your paycheck are permitted only in three situations:

A court order, such as a child support garnishment.
A deduction required by law, such as payroll taxes.
A deduction you authorized in writing for a lawful purpose.⁴

That third category is where disputes cluster. Wage advances, tuition reimbursement, relocation costs, unreturned uniforms or tools, damaged equipment: none of these can be taken out of your final check unless you signed a written authorization before the obligation arose. Even a laptop broken on your last day cannot be docked from your pay without your written consent. The employer’s remedy is small claims court or another legal channel, not self-help through payroll.

Federal law adds a floor. Deductions for tools and equipment cannot drop your pay below the federal minimum wage in any workweek, even with your written consent.⁵

How the Final Check Is Taxed

Your regular final wages are withheld the same way as any paycheck: federal income tax at your usual rate, Social Security, and Medicare. Texas has no state income tax, so nothing is withheld at the state level.

Severance and lump-sum bonuses are treated differently. The IRS classifies them as supplemental wages, and for 2026 employers withhold federal income tax on supplemental wages at a flat 22%. If your total supplemental wages for the year exceed $1 million, the excess is withheld at 37%.⁶ Severance also carries Social Security tax (6.2% on earnings up to $184,500 in 2026) and Medicare tax (1.45% on all earnings).⁷ The U.S. Supreme Court has confirmed severance is taxable wages for FICA. The 22% flat rate isn’t necessarily your actual tax rate for the year; you may owe more or get a refund at filing.

If the Deadline Passes and You Aren’t Paid

You have 180 days from the date the wages were originally due to file a wage claim with the TWC.² Missing that deadline forfeits the TWC process, so put it on a calendar the day you realize you’re short.

File on the TWC’s official form (available in English and Spanish). Include your employer’s name and address, your dates of employment, the amount you believe you’re owed, and supporting documents such as pay stubs, time records, and any relevant employment agreement or handbook language. Incomplete submissions stall the investigation or lead to denial.

Once you file, the TWC mails your employer a notice, and the employer has 14 calendar days to respond with evidence such as payroll records or company policies.⁸ An investigator reviews both sides and issues a Preliminary Wage Determination Order. Either side then has 21 calendar days from the mailing date to file a written appeal to the Wage Claim Appeal Tribunal.⁹ If nobody appeals, the determination becomes final.

Penalties and Enforcement

An employer who violates the Texas Payday Law faces administrative penalties: $100 for a first non-willful violation, up to $1,000 for a willful first violation, and up to $5,000 for each subsequent willful violation.¹ The employer can avoid the penalty by correcting the violation within 30 days of receiving notice, which usually motivates payment once the TWC gets involved. If the employer still refuses after a final order, the TWC can file a lien on the employer’s property or levy its bank account to collect.²

You also have the option of a civil lawsuit, which can matter when the same facts also violate federal wage law. Under the FLSA, a proven minimum-wage or overtime violation lets you recover the unpaid wages plus an equal amount in liquidated damages, effectively doubling the recovery.¹⁰ Federal minimum-wage and overtime complaints can also go to the U.S. Department of Labor’s Wage and Hour Division, which keeps the complaint confidential; retaliation for filing is prohibited.¹¹

The Termination Itself Is Usually Legal

Texas is an at-will state, meaning either you or your employer can end the job at any time, for any reason or no reason, with or without notice.¹² Exceptions are narrow: firing that violates a specific statute (such as retaliation for a workers’ compensation claim or federally protected discrimination), the public-policy exception for refusing to commit a criminal act on the employer’s behalf, or a written contract that guarantees a fixed term or requires cause. Outside those situations, the termination is almost certainly lawful, and your leverage is on the wages, not the firing.

Two Other Things Worth Checking After You Leave

Neither of these is part of the payday rule, but both often apply at the same time.

COBRA. If your employer had 20 or more employees and offered group health insurance, you have 60 days from the date your coverage ends to elect COBRA continuation. Coverage applies retroactively to the day your prior plan stopped, but you pay the full premium plus a 2% administrative fee.¹³

WARN Act. Texas has no state advance-notice law, so only the federal WARN Act applies. Employers with 100 or more full-time employees must give 60 days’ written notice before a plant closing affecting 50 or more workers or a mass layoff of at least 50 employees making up at least one-third of the workforce at a site. The one-third threshold doesn’t apply when 500 or more are laid off. If your employer failed to give required notice, you may be entitled to back pay and benefits for up to 60 days.¹⁴ Smaller employers and individual terminations fall outside the WARN Act.

1
State of Texas. Texas Labor Code Chapter 61 – Payment of Wages
2
Texas Workforce Commission. Texas Payday Law – Wage Claim
3
Texas Workforce Commission. Accrued Leave Payouts
4
State of Texas. Texas Labor Code Section 61.018 – Deduction From Wages
5
eCFR. Part 531 Wage Payments Under the Fair Labor Standards Act of 1938
6
Internal Revenue Service. Publication 15 (2026), (Circular E), Employers Tax Guide
7
Social Security Administration. Contribution and Benefit Base
8
Texas Workforce Commission. Wage Claim and Appeal Process in Texas
9
Texas Workforce Commission. Texas Payday Wage Claim Appeals
10
U.S. Department of Labor. Handy Reference Guide to the Fair Labor Standards Act – Section: Enforcement Through Legal Remedies
11
U.S. Department of Labor. How to File a Complaint
12
Texas Workforce Commission. Pay and Policies – General
13
U.S. Department of Labor. COBRA Continuation Coverage
14
eCFR. Part 639 Worker Adjustment and Retraining Notification