PAYROLL TAX RATES
Tennessee payroll tax rates
Unemployment tax, income tax withholding, minimum wage and paid leave in Tennessee, each with its effective date and the agency page it comes from.
Unemployment insurance
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | Tennessee Department of Labor and Workforce Development (Employment Security, Employer Accounts) (opens in a new tab) | TDLWD, Unemployment Insurance Tax (opens in a new tab) | |
| Taxable wage base | $7,000 | TDLWD, UI Tax Rates (Variable Taxable Wage Base table) (opens in a new tab) | |
| Wage base set each year | No | TDLWD, UI Tax Rates (Variable Taxable Wage Base table) (opens in a new tab) | |
| New employer rate | 2.7%2.7% for every industry since July 1, 2021; by statute a new employer whose two-digit NAICS industry has a reserve ratio below 0% gets that industry's rate from the premium table in effect insteadSurcharges included | TDLWD, Instructions for Report to Determine Status / Application for Employer Number (LB-0441), Premium Rate Information (opens in a new tab) | |
| Employee contribution | None | TDLWD, Unemployment Insurance Tax (opens in a new tab) | |
| When an employer becomes liable | $1,500 or more in gross wages in a calendar quarter, or at least one employee in each of 20 weeks in the current or preceding calendar year. Also any employing unit already liable under FUTA with at least one employee in Tennessee, regardless of weeks or payroll; any successor to a liable employer; 501(c)(3) nonprofits with 4 or more employees in 20 weeks; household employers paying $1,000 cash in a quarter; agricultural employers with 10 or more workers in 20 weeks or $20,000 in a quarter. | TDLWD, Unemployment Insurance Tax ('Who is Liable to Pay Unemployment Taxes?') (opens in a new tab) | |
| Experience rate after | 36 consecutive months | TDLWD, Instructions for Report to Determine Status / Application for Employer Number (LB-0441), Premium Rate Information (opens in a new tab) | |
| Quarterly report due | Last day of the month after the quarter (e.g. April 30 for January to March) | TDLWD, What is 'delinquent cycle'? (opens in a new tab) | |
| FUTA credit reduction | Not yet set | US DOL, FUTA Credit Reductions (opens in a new tab) |
Checked on October 5, 2026.
Income tax withholding
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | None | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) | |
| Withholding rates | No income tax | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) | |
| Supplemental wages | None | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) | |
| Reciprocity | None | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) | |
| Employee's withholding form | None | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) | |
| Local income taxes | No | Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab) |
Checked on October 5, 2026.
Minimum wage
| Item | Value | Effective | Source |
|---|---|---|---|
| Minimum wage | $7.25 | Tenn. Code Ann. 50-2-114, Payment of federal minimum wage (2025 Tennessee Code, Justia) (opens in a new tab) | |
| Tipped employees, cash wage | $2.13 | US DOL Wage and Hour Division, Minimum Wages for Tipped Employees (opens in a new tab) | |
| Rises with inflation | No | TDLWD, Should I be paid minimum wage? (opens in a new tab) | |
| Local rates | No local minimum wages: Tenn. Code Ann. 50-2-112 preempts any local wage or employment benefit mandate on private employers, including a minimum wage above the federal or state one. | Tenn. Code Ann. 50-2-112, Restrictions on local government authority (2025 Tennessee Code, Justia) (opens in a new tab) |
Checked on October 5, 2026.
Paid family and medical leave
| Item | Value | Effective | Source |
|---|---|---|---|
| State program | None | TDLWD, Wages, Fringe Benefits, Paychecks & Breaks (opens in a new tab) |
Checked on October 5, 2026.
Workers' compensation
| Item | Value | Effective | Source |
|---|---|---|---|
| Required | From 5 employeesConstruction: from the first employee | TDLWD Bureau of Workers' Compensation, How many employees do I have to have before I am required to have workers' compensation insurance? (opens in a new tab) | |
| State fund | None; private insurers | TDLWD Bureau of Workers' Compensation, How many employees do I have to have before I am required to have workers' compensation insurance? (opens in a new tab) |
Checked on October 5, 2026.
What a paycheck costs the employer in Tennessee
Employer taxes and contributions on one employee's pay in Tennessee, per check and for the year, at the rates a new employer pays. State rates are the ones on this page; federal rates are the ones on the federal payroll tax rates page.
Pay$
Pay frequency
- Employer taxes and contributions per check
- $252.70
- First check of the year
- Cost per check
- $2,560.39
- Pay included, first check
- Cost per year
- $64,821.00
- Pay included
Later checks cost less once pay passes a wage base: the year's last check costs $2,484.23, pay included.
| Item | Rate | First check | Per year | Source |
|---|---|---|---|---|
| Social Security, employer share | 6.2% on the first $184,500 | $143.08 | $3,720.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Medicare, employer share | 1.45% of all pay | $33.46 | $870.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Federal unemployment (FUTA) | 0.6% on the first $7,000After the full 5.4% credit. Employers in a credit reduction state pay more. | $13.85None after check 4 | $42.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Tennessee unemployment | 2.7% on the first $7,0002.7% for every industry since July 1, 2021; by statute a new employer whose two-digit NAICS industry has a reserve ratio below 0% gets that industry's rate from the premium table in effect instead | $62.31None after check 4 | $189.00 | TDLWD, Instructions for Report to Determine Status / Application for Employer Number (LB-0441), Premium Rate Information (opens in a new tab); TDLWD, UI Tax Rates (Variable Taxable Wage Base table) (opens in a new tab) |
| Employer taxes and contributions | $252.70 | $4,821.00 | ||
| Pay | $2,307.69 | $60,000.00 | ||
| Pay plus employer costs | $2,560.39 | $64,821.00 |
Checked on October 5, 2026. Shows one employee's pay for a full calendar year, every check at the rates in force on October 13, 2026, with all pay subject to these taxes, the new employer rates and the full employer shares the law sets. An employer may choose to pay an employee's share too. Benefits and other costs are not included.
Common questions
A new employer pays 2.7% for every industry since July 1, 2021; by statute a new employer whose two-digit NAICS industry has a reserve ratio below 0% gets that industry's rate from the premium table in effect instead. The tax applies to the first $7,000 of each employee's wages a year. An experience rate follows after 36 consecutive months.
No. Tennessee has no state income tax on wages, so no Tennessee tax is withheld for work done there.
$7.25 an hour.
No. Tennessee has no state paid family or medical leave program funded through payroll.
WORKLIO HCM
Payroll taxes calculated, deposited and filed in every state
Worklio HCM calculates, deposits and files payroll taxes in every state and locality, city, county and school district taxes included, and rates and rules update without you noticing. We help open state accounts when you hire somewhere new. Payroll and HCM for companies with 50 to 50,000+ employees.
Rates in other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Sources
The agency page or document behind each figure, as checked.
- TDLWD, Unemployment Insurance Tax (opens in a new tab)
- TDLWD, UI Tax Rates (Variable Taxable Wage Base table) (opens in a new tab)
- TDLWD, Instructions for Report to Determine Status / Application for Employer Number (LB-0441), Premium Rate Information (opens in a new tab)
- TDLWD, What is 'delinquent cycle'? (opens in a new tab)
- US DOL, FUTA Credit Reductions (opens in a new tab)
- Tennessee Department of Revenue, GEN-34 Income Tax Withholding (opens in a new tab)
- Tenn. Code Ann. 50-2-114, Payment of federal minimum wage (2025 Tennessee Code, Justia) (opens in a new tab)
- TDLWD, Should I be paid minimum wage? (opens in a new tab)
- US DOL Wage and Hour Division, Minimum Wages for Tipped Employees (opens in a new tab)
- Tenn. Code Ann. 50-2-112, Restrictions on local government authority (2025 Tennessee Code, Justia) (opens in a new tab)
- TDLWD, Wages, Fringe Benefits, Paychecks & Breaks (opens in a new tab)
- TDLWD Bureau of Workers' Compensation, How many employees do I have to have before I am required to have workers' compensation insurance? (opens in a new tab)
- IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab)
General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes.