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Taxes
Tennessee Payroll Taxes 2026: Complete Overview for Employers
Tennessee has no state income tax, but employers still owe SUI on the first $7,000 and must handle federal obligations.
Tennessee has no state income tax, but employers still face SUI, federal tax obligations, and strict labor laws. We cover it all — written for small business owners, not accountants.
Written by payroll professionals at Pacific Data Services — trusted since 1969.
Tennessee has no state income tax on wages or salaries, and the former Hall Tax on investment income was fully repealed.
At $7,000, Tennessee’s SUI wage base matches the federal FUTA base, keeping employer unemployment insurance costs minimal.
Tennessee has no state minimum wage law, so the federal minimum of $7.25/hr applies, keeping labor costs low for employers.
Tennessee has no state income tax, but employers still owe SUI on the first $7,000 and must handle federal obligations.
Get your EIN, register with Tennessee, set up withholding, new hire reporting — the complete checklist.
New employer rate 2.7%, experienced range 0.01%–10.00%, wage base $7,000.
Tennessee minimum wage $7.25/hr. Tennessee has no state minimum wage law; the federal minimum of $7.25/hr applies statewide.
IRS classification rules, Tennessee-specific considerations, misclassification penalties.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for Tennessee small businesses.