The living wage in Texas is about $21.77 per hour, or roughly $45,290 per year before taxes, for a single adult working full time, according to MIT’s Living Wage Calculator.1Living Wage Calculator. Living Wage Calculation for Texas That is the pay rate needed to cover basic expenses — housing, food, healthcare, transportation, taxes — without relying on government assistance. It sits roughly three times above the state’s $7.25 minimum wage and climbs sharply once children enter the household.
What a Single Adult Needs to Earn
The $21.77 per hour baseline assumes a standard 40-hour week across 2,080 hours a year.1Living Wage Calculator. Living Wage Calculation for Texas At that rate, a single person can pay rent, buy groceries, keep a car on the road, and carry health insurance on their own. Fall much below it and the arithmetic breaks: bills start competing with each other, and a single car repair or medical copay can tip the month into debt.
Texas gets one structural advantage here. Because the state charges no personal income tax, workers keep more of each paycheck than residents of states that do, which is already baked into the $21.77 figure. The same budget in California or New York would require a higher gross wage.
What Families Need to Earn
Adding dependents reshapes the number quickly. MIT’s statewide figures for common household types:1Living Wage Calculator. Living Wage Calculation for Texas
- Single parent with one child: $35.77 per hour, about $74,402 per year.
- Two working adults with two children: $24.45 per hour each — both parents need to earn at least that much.
- One working adult, one non-working adult, two children: $37.39 per hour for the sole earner.
The jump from a single-person budget to a single-parent budget is the sharpest in the data. Childcare is the main driver. Full-time center-based infant care in Texas commonly runs $11,000 to $15,000 a year, which can rival rent. When two adults both work, splitting the earning load pulls the required per-person rate down to $24.45, but that is still roughly triple the minimum wage, per worker, just to keep the household off public assistance.
What the Living Wage Figure Covers
MIT builds the number from eight categories of basic expenses plus the federal income and payroll taxes a worker actually owes.2Living Wage Calculator. Frequently Asked Questions Housing is usually the biggest line, priced to fair-market rent for modest units. Food uses the USDA’s Low-Cost Food Plan, which assumes meals cooked at home rather than restaurant spending.3Living Wage Calculator. Methodology Transportation carries real weight in Texas, where public transit is limited outside a few urban cores. Healthcare, childcare (for households with children), internet and mobile service, and basics like clothing and personal care fill in the rest.
One omission matters: the calculation includes zero savings, zero retirement contributions, and no leisure spending.2Living Wage Calculator. Frequently Asked Questions A worker earning exactly the living wage pays this month’s bills and nothing more. Treat the figure as a survival floor rather than a comfortable income; building an emergency fund or saving for retirement requires earning above it.
How the Number Shifts by Region
Texas is big, and the cost of living tracks accordingly. In the Austin metro, a single adult needs about $23.71 per hour — roughly $2 above the statewide figure, driven by housing competition in a fast-growing market.4Living Wage Calculator. Living Wage Calculation for Austin-Round Rock-San Marcos, TX Dallas and Houston tend to land near or just above the statewide number. Smaller cities and border communities like El Paso and the Rio Grande Valley generally run lower, mostly because housing costs less.
The gap matters when you’re weighing a job offer. A $21-an-hour paycheck can cover basics comfortably in El Paso and fall short of rent in Austin. Check the MIT calculator for the specific county or metro before assuming the statewide figure applies to you.
Why the Minimum Wage Falls So Far Short
Texas follows the federal minimum wage of $7.25 per hour.5State of Texas. Texas Labor Code 62.051 – Minimum Wage That rate has not changed since 2009, when the final step of the federal increase under 29 U.S.C. § 206 took effect.6Office of the Law Revision Counsel. 29 U.S. Code 206 – Minimum Wage A full-time minimum-wage job pays about $15,080 a year, which barely reaches the 2026 federal poverty line for one person ($15,960) and comes to less than a third of the single-adult living wage.7U.S. Department of Health and Human Services. 2026 Poverty Guidelines
Texas law also blocks cities and counties from setting a higher local minimum for private employment. Under Section 62.0515 of the Texas Labor Code, the state rate overrides any local ordinance.8State of Texas. Texas Labor Code 62.0515 – Application of Minimum Wage to Certain Governmental Entities A narrow exception lets a local government require a higher wage in its own contracts with private companies, but that reaches only the workers on those specific contracts. The $7.25 floor applies statewide, from downtown Dallas to rural West Texas.
Tax Credits That Narrow the Gap
Several federal tax credits are aimed squarely at workers earning between the minimum wage and the living wage. They don’t substitute for higher pay, but they can add thousands of dollars back to a household at tax time.
Earned Income Tax Credit
The EITC is the largest. For the 2026 tax year, a family with one qualifying child can receive up to $4,427, and a family with three or more children up to $8,231.9Internal Revenue Service. Earned Income and Earned Income Tax Credit Tables Workers without children can still qualify, with a maximum credit of $664, provided they are between 25 and 64. The credit is refundable, so it can produce a payment even for a worker who owes no federal income tax.
Child Tax Credit
For the 2026 tax year, qualifying families can claim up to $2,200 per child under 17.10Internal Revenue Service. Child Tax Credit Up to $1,700 of that is refundable through the Additional Child Tax Credit for lower-income families, though the refundable portion phases in based on earnings above $2,500. A two-child household can receive as much as $4,400 in total credits, which chips away at the higher wage families need.
Premium Tax Credit
If you buy health insurance on the federal marketplace, the Premium Tax Credit reduces your monthly premium. For 2026, eligibility generally runs from 100% to 400% of the federal poverty level — roughly $15,960 to $63,840 for a single person.11Internal Revenue Service. Questions and Answers on the Premium Tax Credit7U.S. Department of Health and Human Services. 2026 Poverty Guidelines The expanded subsidies in place from 2021 through 2025 have expired, so households above 400% of the poverty level no longer qualify, and there is no cap on how much excess advance credit must be repaid at tax time.
The Texas Coverage Gap
Texas has not expanded Medicaid under the Affordable Care Act. For parents and caretakers, the income limit sits at roughly 12% of the federal poverty level — about $1,915 a year for a single parent — which excludes most working adults.12Medicaid.gov. Texas State Profile Children can qualify at higher income levels through CHIP, but adult coverage remains among the most restrictive in the country. SNAP cuts off at about $25,824 a year in gross income for a single person — below the living wage for every household type.13Texas Health and Human Services. SNAP Food Benefits
The result is a coverage gap particular to Texas. A single adult earning $10 or $12 an hour sits above the Medicaid cutoff but well below the living wage, and without the Premium Tax Credit cannot realistically afford marketplace insurance. That gap — the stretch between $7.25 and $21.77 an hour — is where most of the state’s working poor live.