Tennessee Wage and Payroll Tax Facts

February 02, 2024

Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Tennessee.

The Volunteer State doesn't have a specific minimum wage requirement or law for its businesses. Instead, it applies the rates required by the federal government in the Fair Labor Standards Act (FLSA) where appropriate. 
When it comes to processing payroll, Tennessee-based organizations must handle the following taxes in addition to those required by the federal government:

The below information was last updated January 30, 2024. It is not intended as legal or tax advice.

Tennessee Minimum Wage Rates

Wage Type

Tennessee Rates*

Federal Rates

Minimum Wage



Tipped Minimum Wage



Actual Tip Credit



*The state doesn't have a minimum wage law, so the federal rates under the FLSA are used when applicable.

Tennessee State Income Tax (SIT) Rates

Tennessee is one of the few states that doesn't impose or collect a personal income tax.

Tennessee State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.

Tennessee SUI Tax Details

Taxable Wage Base


Employee Subject to Tax


Rates for Experienced Employers

0.01% - 10.00%

Rates for New Employers


Effective Period

Fiscal Year (July 1 - June 30)

Voluntary Contributions Allowed


Tennessee State Disability Insurance (SDI) Rates

SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Tennessee, however, doesn't require employers to collect an SDI tax.

Miscellaneous Tennessee Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Tennessee currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in Tennessee pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Paid Sick Leave (PSL) Taxes

The state of Tennessee doesn’t require employers to collect PSL taxes, nor does the state have a program providing such leave to employees.

Paid Family and Medical Leave (PFML) Taxes

The state of Tennessee doesn’t require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.

Tennessee Employer Registration

Contact the Department of Labor & Workforce Development for help with your state-based employer registration, including best practices, account numbers, and unemployment information.

Registration Details

Department of Labor & Workforce Development


(844) 224-5818

Registration Form

Form LB-0441

Registration Instructions

Paper registration is available. Account numbers will be issued in 5-10 days.

Additional Tennessee Payroll Tax Resources


This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.


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