Having assisted companies in relocation and expansion for over 15 years, I’ve consistently observed the pivotal role of the cost of living. It’s not merely a perk for employees but a strategic business advantage. Texas’ cost of living consistently undercuts the national average, providing companies in the state with a distinct edge in talent attraction, competitive compensation, and long-term employee retention.
It’s simple: Texas is a great place to live and work.
By alleviating payroll pressures and enhancing employee satisfaction, businesses can expect to see a direct impact on their bottom line: increased margins and reduced turnover. With the support of the Texas Economic Development Connection (Texas EDConnection), businesses can easily navigate this transition. We specialize in connecting companies like yours with cities that are fully equipped to foster their success.
Learn more about our relocation services.
So, how does this advantage play out? Let’s look at the numbers. The simplicity of the Texas advantage is reassuring, making it easier for businesses to understand and implement.
Texas Living Expenses vs National Averages
According to MERIC, Texas ranks 7–10% below the national average in overall cost of living. Here’s a breakdown:
- Housing: 16% below national average (Bankrate)
- Utilities: 8% below national average (Compare Power)
- Transportation: 3–5% below national average (Texas A&M TTI)
- No state income tax: Adds 5–13% to take-home pay (TurboTax)
Texas Business Benefits:
- Lower salary requirements without compromising quality of life
- Reduced real estate and facility costs
- Talent migration from expensive states
- Budget flexibility for reinvestment or hiring growth
If you compete for talent with companies in California or New York, your Texas location gives you a built-in cost advantage. Explore our city partner map to see where opportunity meets affordability.
How Texas Attracts Top Talent
Top talent goes where opportunity and affordability meet. Texas checks both boxes. Remote workers, mid-career professionals, and young families are choosing Texas for one reason: it makes financial sense.
Here’s what they get:
- Bigger homes for the same salary
- Lower taxes and living expenses
- Strong job markets
- Access to airports, highways, and major employers
Migration Drivers:
- Relocation from high-cost hubs (Bay Area, NYC, Seattle)
- Salary stretching further
- Career growth in lower-cost cities
Texas EDConnections Regions:
Texas EDC partners with business-ready communities across the state:
Metroplex Region
- Denison, Fairview, Melissa — Access to DFW markets and logistics
Alamo Region
- Boerne, Cibolo, Gonzales — Oil and gas talent, military presence
Capital Region
- Buda, Jarrell, Marble Falls — Austin overflow and entrepreneurial scene
Gulf Coast Region
- Huntsville — Port access and energy corridor proximity
High Plains Region
- Muleshoe — Low utility and land costs
Northwest Texas Region
- Bowie — Diverse industries and rural workforce access
South Texas Region
- Laredo — Border trade and international business
Upper East Texas Region
- Henderson, Marshall — Manufacturing infrastructure and highway access
Is your business missing out on talent by staying in a high-cost market?
Salary Advantages for Employers
Labor is one of your most significant expenses. In Texas, it goes further.
Take a Software Engineer. In San Francisco, you’ll pay $150,000+. In Austin? Around $120,000. That’s a 20% cost reduction—before factoring in taxes or real estate.
Here’s a breakdown:
| Role | Texas Avg | California Avg | New York Avg | % Savings in TX |
|---|---|---|---|---|
| Software Engineer | $120,000 | $150,000 | $145,000 | 20–25% |
| Financial Analyst | $78,000 | $100,000 | $95,000 | 20–22% |
| Marketing Manager | $88,000 | $112,000 | $110,000 | 20% |
| Operations Director | $110,000 | $135,000 | $130,000 | 18–20% |
Source: Salary.com, PayScale
Business Benefits:
- Lower payroll pressure
- More flexibility in hiring packages
- Ability to reallocate savings to growth
- Competitive edge without inflating salaries
I worked with a healthcare tech firm from Chicago that relocated operations to Buda. They cut payroll by 18% and saw a 40% increase in qualified applicants within 6 months.
Employee Retention Benefits
Turnover costs your business. According to SHRM, the average cost of replacing an employee is 33% of their annual salary.
Lower cost of living improves retention. Here’s why:
- Employees can afford homes
- Commutes are manageable
- Lower stress, higher satisfaction
- Families get rooted in the community
Sticky factors matter. When employees build lives, they stay longer.
Example Benefits:
- Homeownership boosts commitment (National Association of Realtors)
- Commute times in most Texas EDC regions average under 30 minutes (Texas A&M TTI)
- Local schools, recreation, and safety keep families stable
How much is turnover costing your business each year?
Regional Advantages Across Texas
Every region in Texas brings unique business advantages:
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- Metroplex Region: Access to major highways, shipping, and the DFW metro
- Alamo Region: Ties to energy, defense, and skilled labor
- Capital Region: Creative industries, tech, and startups
- Gulf Coast Region: Logistics via ports and energy infrastructure
- High Plains Region: Reliable utilities and affordable land
- Northwest Texas Region: Resilient economy with a diversified business base
- South Texas Region: Proximity to Mexico and international trade
- Upper East Texas Region: Rail, highway access, and low operating costs
Which region best aligns with your growth strategy? Explore our regional page.
How Texas EDC Helps Your Business
Relocating or expanding a business can be daunting. The Texas Economic Development Connection can help by offering comprehensive support and guidance throughout the process.
Here’s how it works:
-
- Message — We learn about your business, goals, and workforce needs
- Match — We connect you to communities that meet your criteria
- Move — We support your exploration and relocation process
Our network of regional partners helps companies move efficiently and with confidence. Whether you’re in manufacturing, logistics, software, or services, we know who’s ready to help.
Ready to Compete Smarter?
The Texas cost of living gives you a real shot at attracting and retaining great people—without breaking the bank. The case for Texas is clear when you combine that with our infrastructure, workforce, and business incentives.
Your next move doesn’t have to be complicated. Let Texas EDC help you explore your best options.
Let’s talk about where your business goes next. Contact us here to start the conversation.
About the Author - "Super" Dave Quinn
Lead Economic Development Consultant, Texas EDC
With over 15 years of experience in economic development, Dave has helped more than 200 companies successfully relocate or expand operations. He holds the CEcD designation and an MBA from the University of Texas. His background spans corporate site selection and municipal economic development leadership. Dave speaks regularly at national industry conferences and is passionate about helping small businesses thrive in Texas.
FAQ The Cost of Living In Texas
Why is Texas's cost of living lower than other states?
Texas has lower housing costs, no state income tax, and competitive utility and transportation expenses, which reduce overall living costs.
How does the cost of living impact salary negotiations?
When employees need less income to live comfortably, you gain flexibility in salary discussions while remaining competitive.
Which Texas communities are best for recruiting talent?
Metroplex and Capital regions attract tech talent. Alamo and Gulf Coast regions draw skilled trades. Texas EDC matches your business to the right fit.
How can I explain the Texas advantage to potential hires?
Focus on take-home pay, lower housing costs, quality of life, and shorter commutes. These translate to a better life without needing a bigger paycheck.
