Texas Payday Law
In a nutshell, the Texas Payday Law (TPL) requires an employer to pay its employees in full and on time on regularly scheduled paydays. “In full” means the full pay that is due to the employee under the pay agreement that was in effect when the work was actually performed. “On time” means just that — employees are paid on the scheduled paydays. If the payday falls on a day when the company is not normally open for business, it is extended to the next business day. Per the TPL, non-exempt employees must be paid at least twice per month on regularly scheduled paydays, and exempt employees at least once per month. “Exempt” generally refers to whether the employee meets the requirements for an overtime exemption as a salaried executive, administrative or professional employee under the Fair Labor Standards Act (FLSA), including a minimum weekly salary of at least $684.
Deductions
Three categories of deductions from pay are allowed under the Texas Payday Law:
- Deductions ordered by a court;
- Deductions required or specifically authorized under state or federal law; and
- Deductions made for a lawful purpose and authorized by the employee in writing.
Deductions Required or Specifically Authorized by Law
1. Court-ordered child support/alimony
2. Guaranteed student loan wage attachment
3. IRS tax levy
4. Withholding tax
5. FICA tax
6. Any garnishments mandated by a federal court (as in bankruptcy cases)
Lawful Deductions (Written Authorization Needed)
1. Meals, lodging and other facilities
2. Voluntary wage assignment
3. Loans
4. Wage or salary advances
5. Vacation pay advances
6. Wage overpayments
7. Uniform and uniform cleaning costs
8. Union dues
9. Misappropriated cash
10. Payments toward a property return security deposit
11. Any other deduction for a lawful purpose
Fringe Benefits
Paid leave, paid holidays, and severance pay promised in a written policy or agreement are enforceable parts of the wage agreement under the TPL and are enforced according to the terms of such policies.
Final Pay
The TPL regulates the timing of the final paycheck. The deadline for the final paycheck depends on whether the work separation was voluntary or involuntary. In the event of a discharge or a layoff, the final pay is due by the sixth calendar day following the effective date of the work separation. In the case of a resignation, the final pay is due by the next regularly scheduled payday. Commissions, bonuses and severance pay are payable in accordance with their respective plans or agreements.
Delivery of Wages
Employers have significant flexibility in delivering wages, with options including in-person delivery, direct deposit or payment to an authorized third party. However, certain methods require strict compliance; for instance, payment of wages by EFT (electronic funds transfer, or direct deposit) involves prior arrangements and paperwork with a bank and is subject to federal and state rules. Payment with a payroll or debit card requires 60 days’ advance written notice, and the employer must provide the employee with information on usage fees, opting out of the payroll card program and available alternative ways of receiving pay. If the employee receives part or all of the wages “in kind” (in a form other than cash, a negotiable money order or a check), the employee must have authorized it in writing in advance of the payment.
Although providing written statements of earnings — commonly known as pay stubs — is not a strict requirement for employees covered under the FLSA (see Sections 62.003 and 62.151 of the Texas Minimum Wage Act), it remains a critical best practice for employers. Issuing these statements helps satisfy federal recordkeeping obligations and fosters transparency by showing employees exactly how their pay and deductions were calculated, which helps prevent disputes. These records may be delivered in either physical or electronic formats. If sent via email, consider using password protection and/or encryption, since privacy and identity theft issues are becoming increasingly critical. If sent via regular mail, Texas law requires employers to give employees an annual reminder that they have the right to request that the company not print their Social Security number on any documents sent by mail (see Section 501.001(b) of the Texas Business & Commerce Code). Finally, it is essential that wages never be paid in cash without obtaining a signed, dated receipt from the employee, as a lack of documentation can leave an employer vulnerable to claims of non-payment.
For questions about this issue or other employment-related matters, employers can call the employer hotline at (800) 832-9394 or email employerinfo@twc.texas.gov.
This article originally appeared in the October 2026 issue of Texas Business Today and has been edited for length and clarity.
