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Tennessee has no state income tax on wages — the simplest payroll tax profile of any state in this collection. Federal-only withholding, low SUTA rates, and a right-to-work environment. Rippling handles TN TDLWD filings and workers’ comp reporting.
Tennessee is one of the US’s most employer-friendly payroll states: no state income tax on wages (fully repealed 2021), no state paid family leave, no SDI, right-to-work, and a moderate SUTA burden. Nashville has emerged as a major technology, healthcare, and financial services hub with strong talent growth. Memphis, Knoxville, and Chattanooga are also significant employer markets. Tennessee’s payroll obligations are limited to federal taxes, SUTA, and workers’ compensation.
Rippling’s Tennessee payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| TN SUI (TDLWD) | New employer 2.7% | On first $9,000 of wages (2024) |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% | No wage base limit |
| Workers’ Compensation | Varies by risk class | Required for 5+ employees (most industries) |
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| Contribution | Rate | Notes |
|---|---|---|
| Federal Income Tax | Graduated 10–37% | Per W-4 |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% + 0.9% surtax | Surtax above $200K single |
| Tennessee State Income Tax | 0% | No state income tax on wages (Hall Income Tax repealed January 2021) |
| Tennessee Wages | TN Rate |
|---|---|
| All wage income | 0% (no state income tax) |
No Tennessee state income tax on wages. No state withholding obligation. Federal income tax only. No annual state income tax reconciliation required for wage income.
Final Pay: Tennessee requires final pay on the next regularly scheduled payday. Accrued vacation payout governed by employer written policy — a consistent written forfeiture policy is enforceable in Tennessee.
Tennessee has no state income tax on wages. The Hall Income Tax (which applied only to investment income) was fully repealed effective January 1, 2021. Employees pay only federal income tax on wages, with no state withholding required. Employers have no state income tax withholding obligation for wage income.
Tennessee requires workers’ comp coverage for employers with 5 or more employees in most industries (agricultural: 5+; coal mining: 1+; construction: 1+). Private market coverage required. Tennessee’s workers’ comp system has been reformed to be more employer-friendly since 2013.
Tennessee’s minimum wage is $7.25/hour — matching the federal minimum. Tennessee has preempted local minimum wage ordinances, so cities cannot set their own minimums. The federal floor applies statewide.
Tennessee is a right-to-work state with no state income tax on wages, no state paid family leave, no SDI, and relatively low workers’ comp costs. This makes Tennessee one of the most employer-friendly payroll states in the US — payroll obligations are limited to federal taxes, SUTA, and workers’ compensation.
