Tennessee Payroll & Paycheck Tax Calculator
Running payroll in the Volunteer State shouldn't feel like climbing the Smoky Mountains. From Memphis to Nashville, our Tennessee Payroll Tax Calculator makes managing employee withholdings as smooth as Tennessee whiskey. While there's no state income tax to worry about, you still need to handle federal requirements, unemployment insurance, and various compliance issues—all made simple with our tool.
Tennessee Payroll Tax Steps
Tennessee’s lack of state income tax might make payroll seem like a walk in Dollywood, but don’t get too comfortable. Between federal withholdings, unemployment insurance, and workers’ comp requirements, there’s still plenty to manage. Our calculator helps you navigate Tennessee’s payroll landscape with confidence, ensuring accurate calculations from Music City to the Mississippi.
Here are some key steps you’ll have to take to make smarter payroll decisions.
Step #1: Register with Tennessee Department of Labor and Workforce Development
Even without state income tax, you'll still need to register with the Tennessee Department of Labor and Workforce Development for unemployment insurance. The process is straightforward through Tennessee's online TNNEWHIRE portal. You'll receive an employer account number for unemployment tax purposes.
New employers pay 2.7% unemployment tax on the first $10,000 of each employee's wages for their first year.
Step #2: Handle Tennessee's Simplified Form Requirements
The Volunteer State keeps paperwork refreshingly light without state income tax forms:
- Federal W-4 forms for withholding (no state equivalent needed!)
- Federal forms from the IRS: • Form 941 (Quarterly federal tax return) • Form 940 (Federal Unemployment Tax, FUTA) • W-2 and 1099 (Year-end wage reporting)
- New Hire Reports: Submit within 20 days to Tennessee New Hire Registry
- Workers' Compensation: Required for businesses with 5+ employees
- LB-0851: Quarterly wage and employment report for unemployment
Without state income tax withholding, Tennessee employers have fewer forms than most states—music to any business owner's ears.
Step #3: Know Tennessee's Minimum Wage and Overtime Laws
Tennessee doesn't have its own minimum wage law, so the federal minimum of $7.25 per hour applies. Tipped employees can be paid $2.13 per hour, with employers making up any difference if tips don't reach minimum wage.
Tennessee follows federal overtime rules exactly: time-and-a-half after 40 hours in a workweek. No daily overtime requirements exist, and weekends or holidays don't automatically trigger overtime unless pushing employees over 40 weekly hours.
Step #4: Follow Tennessee's Pay Period Requirements
Tennessee doesn't mandate specific pay frequencies, giving employers flexibility to choose what works best. Most employers opt for weekly, bi-weekly, or semi-monthly pay periods. The key is establishing a regular schedule and maintaining it consistently.
For final paychecks, Tennessee keeps it simple: wages are due on the next regular payday or within 21 days of termination, whichever comes first. This applies whether employees quit or are terminated.
Tennessee doesn't require paid sick leave, vacation time, or holiday pay. However, if you include these benefits in your employee handbook or contracts, you must honor them.
Step #5: Use our Simple Tennessee Payroll Calculator
With no state income tax, Tennessee calculations are more straightforward than most states:
- Federal income tax withholding
- FICA taxes (Social Security and Medicare)
- Federal unemployment tax (FUTA)
- State unemployment tax (SUTA)
Our calculator provides instant, accurate calculations for gross pay, federal deductions, and net take-home pay—proving that simple doesn't mean sloppy.
Step #6: Submit Federal Taxes and File Tennessee Unemployment Reports
Tennessee employers have lighter filing requirements than most states:
- Quarterly LB-0851 wage reports for unemployment insurance
- Federal tax deposits and returns (941, 940)
- Annual W-2 and 1099 filings
Without state income tax filings, you can focus on getting federal requirements right. After your first year, unemployment rates adjust based on experience, ranging from 0.01% to 10%.
Fingercheck and any related entities do not offer tax, accounting, or legal advice. This content is designed for informational purposes only and should not be considered a source of tax, legal, or accounting advice. It is recommended that you consult your tax, legal, and accounting advisors before undertaking any related activities or transactions.