Texas is the only state where workers’ comp is usually optional
For most private employers, Texas does not require workers’ compensation insurance. That makes Texas unusual—but it does not make labor free of employer cost, and it does not remove other obligations.
What this means for labor cost
- If you carry coverage (a “subscriber”), the premium still adds to labor cost by classification and payroll.
- Government contracts require coverage for each employee on the project, and private clients often require it too.
- Employers who do not carry coverage (“non-subscribers”) must notify employees and the Division, and they give up certain legal protections.
- Federal payroll taxes and any benefits you provide still apply.
Official starting points
Texas Department of Insurance, Division of Workers’ Compensation — Employer FAQ and coverage fact sheet.
Enter your verified numbers in the Labor Burden Calculator. See also State Payroll Costs.
MarginJob does not decide whether coverage is required for your situation. Confirm subscriber status and obligations with TDI-DWC and qualified advice.