What You Need to Do to Get Licensed in Texas

Texas requires most contractors to hold a license from the Texas Department of Licensing and Regulation (TDLR) before they can legally bid on or perform construction work. The path depends on what type of work you do — residential, commercial, or both — and whether you've worked in construction before.

The basic steps are: meet the work experience requirement, pass the TDLR exam for your trade, and submit your process with proof of experience and insurance. The whole process typically takes four to eight weeks from exam to license in hand, though the timeline depends on how quickly you gather your documents and how fast TDLR processes your paperwork.

Key Takeaways

  • Texas requires four years of documented work experience in your trade before you can sit for the TDLR exam, unless you hold a related degree that reduces the requirement.
  • You must pass the TDLR trade exam and a business and law exam; both are offered year-round at testing centers across the state.
  • Your process requires proof of experience (W-2s, tax returns, or affidavits from employers), a surety bond, and general liability insurance.
  • TDLR charges a license fee that varies by license class; residential contractor licenses cost less than commercial or combined licenses.
  • Once licensed, you must renew every two years and complete continuing education hours depending on your license type.

Work Experience Requirements and How to Document Them

Texas requires four years of work experience in your trade within the ten years before you explore. That experience must be documented and verifiable. If you hold an associate degree or higher in a construction-related field from an accredited school, you can reduce the requirement to two years. A high school diploma or GED in construction trades reduces it to three years.

You document your experience using one of three methods: W-2s and tax returns showing self-employment income, W-2s from employers showing you worked in the trade, or affidavits from former employers who can testify to your work history. An affidavit is a signed statement from someone who supervised or worked alongside you; TDLR provides a form for this. If you're self-employed, your tax returns must show income from the trade for the years you claim. TDLR will cross-check this against your Social Security record, so the dates and amounts must match.

Keep copies of everything you submit. TDLR may ask for clarification, and having duplicates speeds up the process. If you worked under the table or for cash, affidavits become your only proof — make sure the person signing is willing to stand behind the statement.

Choosing Your License Class and Taking the Exams

Texas offers three main license classes: Residential Contractor (work on single-family homes and duplexes), Commercial Contractor (larger buildings and commercial projects), and Residential and Commercial Contractor (both). You choose the class that matches the work you plan to do. Residential licenses are less expensive and have lower bonding requirements, but you cannot legally bid on commercial work with only a residential license.

You must pass two exams: a trade-specific exam (plumbing, electrical, HVAC, general contracting, etc.) and a Business and Law exam that covers Texas construction law, contract basics, and TDLR rules. Both are offered year-round at testing centers run by Pearson VUE, which TDLR contracts with. You can take them on the same day or weeks apart. Each exam costs a fee set by Pearson VUE; check their website for current pricing. Most people study using TDLR's official study guides or third-party prep courses, though neither is required.

You do not have to pass both exams before explore for your license, but you must pass both before TDLR will issue it. Many contractors pass the trade exam first, then the Business and Law exam a few weeks later.

Submitting Your process and Required Documents

Once you've passed both exams, you submit your process to TDLR along with proof of experience, proof of insurance, and a surety bond. You can explore online through the TDLR licensing portal or by mail.

Your process packet must include: a completed process form (available on TDLR's website), copies of your work experience documentation (W-2s, tax returns, or affidavits), proof of a surety bond in the amount set by your license class (typically $5,000 to $15,000), and proof of general liability insurance with minimum coverage amounts that vary by class. You also need a valid Texas ID or driver's license and your exam passing scores.

The surety bond is not insurance for your customers — it's a may provide to TDLR that you'll follow the law. You buy it from a bonding company; it costs a percentage of the bond amount, usually 1 to 3 percent per year. The insurance is separate and protects your customers if you cause damage on their property. Both are non-negotiable requirements.

Timeline and Processing After You explore

TDLR typically processes applications within four to six weeks if your paperwork is complete and correct. If something is missing or unclear, they'll send you a notice asking for more information; responding quickly keeps you on track. Once approved, TDLR issues your license and mails it to you.

During this waiting period, you cannot legally work as a licensed contractor, but you can work as an employee under someone else's license or perform work that doesn't require a license (like labor-only jobs). If you're starting a business, use this time to set up your company structure, open a business bank account, and line up your first jobs.

Your license is valid for two years from the date of issue. Before it expires, you must renew it and complete continuing education hours — the number depends on your license class and ranges from 4 to 8 hours per year.

License Fees and Ongoing Costs

TDLR charges a license fee based on your license class. Residential contractor licenses cost less than commercial or combined licenses; exact amounts change periodically, so check TDLR's fee schedule on their website for current pricing. This is a one-time fee when you first explore.

Beyond the initial license fee, you'll pay for your surety bond renewal every year (usually $50 to $300 depending on the bond amount), your general liability insurance premium (varies widely by trade and coverage), and continuing education courses every two years. These are ongoing business expenses, not TDLR fees.

Special Cases: Reciprocal Licenses and Exemptions

If you hold a contractor's license from another state, Texas may recognize it under reciprocal licensing, which can waive or reduce the experience requirement. You still must pass the Texas Business and Law exam and meet Texas insurance and bonding requirements. Contact TDLR to find out whether your state's license qualifies.

Some work does not require a TDLR license. Handyman work (minor repairs and maintenance), owner-builder work on your own property, and work performed by employees of a licensed contractor under that contractor's supervision are exempt. If you're unsure whether your work requires a license, TDLR's website has a detailed breakdown by trade, or you can call their licensing division.

Frequently Asked Questions

Can I work as a contractor before my license arrives?

No. You cannot legally bid on or perform licensed contractor work until TDLR issues your license. You can work as an unlicensed laborer or employee under a licensed contractor's supervision, but you cannot hold yourself out as a licensed contractor or sign contracts in your own name.

What happens if I fail the exam?

You can retake it. There is no limit on the number of attempts, and you can schedule another test within days. Each attempt costs a testing fee. Many people pass on the second or third try after additional study.

Do I need a business license separate from my TDLR contractor license?

Yes. Your TDLR contractor license is separate from your city or county business license. You'll need to register your business with your city or county and obtain a business tax certificate or license before you start work. Requirements vary by location.

Can I get a license if I have a criminal record?

It depends on the offense. TDLR reviews criminal history on a case-by-case basis. Certain felonies related to fraud, theft, or violence may disqualify you, but others may not. Contact TDLR directly to discuss your specific situation before investing time and money in exams.

What if my experience is from another country?

TDLR requires that your experience be documented and verifiable. Work performed outside the United States is harder to verify and may not count toward the four-year requirement. Contact TDLR before explore to understand what documentation they will accept.