Tennessee payroll taxes
Every tax withheld from a Tennessee paycheck or paid by the employer in 2026, with rates and wage limits.
Last verified November 2, 2026. Sources: oui.doleta.gov, taxfoundation.org, oregon.gov.
| Tax | Employee pays | Employer pays | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $184,500 |
| Medicare | 1.45%* | 1.45% | No limit |
| FUTA | — | 0.6% | $7,000 |
| Tennessee SUTA | — | 2.7% (new) | $7,000 |
| Tennessee income tax | None | — | — |
*Plus 0.9% Additional Medicare Tax withheld on wages over $200,000. FUTA rate shown is net of the state credit.
State unemployment insurance
Tennessee charges new employers 2.7% on the first $7,000 each employee earns in a year. After a few years, the rate is based on the employer's layoff history and ranges from 0.01% to 10%. Fiscal-year (July 1) rates. New employers pay 2.7% for the first 3 years (construction may differ). Eddy listed a $9,000 wage base, but DOL, Equifax and Nextep say $7,000.
Register and file with the Tennessee unemployment tax agency.
Income tax withholding
Tennessee does not tax wages, so there is no state income tax withheld from paychecks.
Frequently asked questions
- What payroll taxes do employers pay in Tennessee?
- Social Security, Medicare, federal unemployment (FUTA) and Tennessee unemployment insurance (SUTA).
- What is the Tennessee SUTA wage base for 2026?
- $7,000 per employee.
- Does Tennessee require state income tax withholding?
- No. Tennessee has no tax on wages.