--- title: "Entity vs EOR in Texas" description: "Compare forming a Texas entity against hiring through Teamed's EOR, with the real filing cost, franchise tax rules, and when to switch." canonical: https://www.teamed.global/country-hiring-guides/united-states/texas/eor-vs-entity --- ![Texas business district.](/cluster-assets/country-hiring-guides/united-states/texas/eor-vs-entity/images/hero.webp) # Entity or EORin Texas. Teamed hires your Texas team through its EOR entity today, or builds your own Texas entity when the volume justifies it. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Texas guide At a glance ## Texas in brief Texas charges a $300 formation fee to register an entity with the Secretary of State. Franchise tax is calculated on your margin rather than raw revenue, and the minimum franchise tax due is $0. None of that changes what you owe your employees, but it changes what your back office has to track. Minimum franchise tax$0 Franchise tax basismargin Formation / registration fee$300 The real cost ## What a Texas entity costs to run Setting up a Texas entity starts with a $300 filing fee paid to the Texas Secretary of State. After that, your entity owes franchise tax, but Texas calculates it on your margin, not your revenue, and the minimum franchise tax due is $0. That looks simple on paper. In practice, you still need a registered agent, a payroll setup, workers comp decisions, and someone filing the franchise tax return every year, even in a year where the tax owed is $0. The EOR route ## How Teamed hires in Texas without a new entity Teamed already holds the entity infrastructure in Texas. Your new hire signs a compliant Texas employment agreement, gets paid through Teamed's payroll, and you never touch the $300 filing or the franchise tax return. This is the fastest path when you are hiring your first Texas employee, or your fifth, and you are not yet sure how long the team will stay at that size. Timing the switch ## When a Texas entity starts to make sense There is no fixed headcount where an entity becomes worth it. It depends on salaries, how many people you plan to hire in Texas, and how long you intend to keep them there. Teamed's crossover calculator models this against your real numbers, weighing ongoing EOR costs against the $300 formation fee and the franchise tax profile you would carry as your own Texas entity. Before you commit ## Sometimes an employer of record is the better fit An employer of record is sometimes the better answer for Texas, not a stopgap you are meant to outgrow. If your Texas headcount is small or still moving, or you are testing whether Texas is even the right market, staying on Teamed's EOR keeps you flexible. Talk to a member of the team about your specific plan, or run the numbers yourself in the crossover calculator. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue. Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. Global Entity and Employment Operations, which we call GEMO, is how Teamed builds your Texas entity while you keep hiring through the EOR without a gap. We handle the $300 state filing, get you set up for franchise tax on the margin basis, and migrate your existing Texas team onto the new entity's payroll, across 100+ countries when you need entities elsewhere too. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Texas Questions ## Texas entity and EOR questions Does Texas charge a minimum franchise tax on a new entity? The minimum franchise tax in Texas is $0, and the tax itself is calculated on your margin rather than gross revenue. That does not remove the filing obligation, it just means many smaller entities owe nothing in a given year. How much does it cost to register a company in Texas? The Texas Secretary of State charges a $300 formation fee to register an entity. That figure covers the filing itself, not ongoing costs like a registered agent or payroll setup. Is hiring through an EOR legal in Texas? Yes, using an employer of record is a standard, legal way to employ someone in Texas without registering your own entity there. The EOR becomes the legal employer of record for tax and compliance purposes while you direct the day to day work. When should I move from Teamed's EOR to my own Texas entity? There is no set headcount trigger. It comes down to salaries, how many people you plan to employ in Texas, and how long you expect to stay, which is exactly what the crossover calculator is built to model. What does Teamed actually do differently when setting up a Texas entity? Teamed handles the $300 state filing, gets you registered correctly for franchise tax on the margin basis, and migrates your existing EOR employees onto the new entity's payroll so there is no employment gap. Where these figures come from ## Sources Figures on this page are drawn from the Texas Comptroller and the Texas Secretary of State. ## More on entities in Texas - [Hiring in Texas, overview](/country-hiring-guides/united-states/texas)parent - [Texas setting up](/country-hiring-guides/united-states/texas/entity-setup)sibling - [Texas running costs](/country-hiring-guides/united-states/texas/entity-running-costs-and-filings)sibling - [Texas tax presence](/country-hiring-guides/united-states/texas/permanent-establishment-risk)sibling - [Texas moving from an eor](/country-hiring-guides/united-states/texas/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Texas](https://www.teamed.global/contact?from=eor-vs-entity)CTA