Does Tennessee have a state income tax?

No. Tennessee does not tax wages, salaries, or other earned income, and the state constitution explicitly prohibits the legislature from enacting a tax on earned income. Tennessee previously imposed the Hall Tax, a flat 1-2% levy on interest and dividend income, but that tax was phased out entirely and repealed effective January 1, 2021. Since then, Tennessee residents pay zero state-level income tax on any form of personal income, placing the state among the nine US states with no income tax. This means your Tennessee paycheck is reduced only by federal income tax, Social Security, and Medicare.

How much does an $18/hour worker take home in Tennessee?

At $18/hour working 40 hours per week, filing single with a 3% pre-tax 401(k) contribution, your gross annual pay is $37,440. After subtracting the 401(k) contribution of $1,123.20, federal income tax of approximately $2,319.52, Social Security of $2,251.64, and Medicare of $526.59, your annual take-home is approximately $31,219.05, which works out to about $1,200.73 per biweekly paycheck. Because Tennessee has no state income tax, the entire calculation involves only federal obligations, making your take-home noticeably higher than an identical worker earning the same wage in neighboring North Carolina or Georgia, where state taxes could reduce the biweekly amount by $30 to $60.

What is the Tennessee minimum wage in 2026?

Tennessee does not have a state minimum wage law, so the federal minimum wage of $7.25 per hour applies as the floor for most covered workers. Tennessee is one of a handful of states that has never enacted its own minimum wage legislation, relying entirely on the federal Fair Labor Standards Act to set the baseline. However, many Tennessee employers pay well above the federal minimum due to competitive labor markets, particularly in Nashville, Memphis, and Chattanooga. At $7.25 per hour working 40 hours per week, a full-time worker earns only $15,080 annually, with most paycheck deductions coming from FICA rather than federal income tax because the standard deduction of $15,000 shelters nearly all of that income.

Do I still pay FICA taxes in Tennessee?

Yes, FICA taxes are federal obligations that apply in all 50 states regardless of whether a state levies its own income tax. You pay 6.2% of your gross wages toward Social Security on earnings up to the annual wage base of $176,100, and 1.45% toward Medicare on all wages with no upper limit. If your wages exceed $200,000 as a single filer or $250,000 as a married joint filer, you owe an additional 0.9% Medicare surtax on the amount above those thresholds. Your employer matches the base FICA contributions, paying 6.2% for Social Security and 1.45% for Medicare on your behalf, but that employer share does not reduce your paycheck and is not reflected in your take-home pay calculation.

How does Tennessee fund its government without an income tax?

Tennessee relies primarily on sales tax revenue, which is one of the highest combined rates in the nation. The state sales tax rate is 7%, and local jurisdictions can add up to 2.75%, pushing the combined rate as high as 9.75% in many counties. This makes Tennessee's sales tax among the most aggressive in the country. Additionally, the state collects revenue from a franchise and excise tax on businesses, fuel taxes, tobacco taxes, and various licensing fees. Tennessee also benefits from its tourism industry, particularly in Nashville, which generates substantial hotel occupancy tax revenue and sales tax from visitors to the city's entertainment and music venues.

Is it better to live in Tennessee or Kentucky for take-home pay?

For identical hourly wages, Tennessee workers take home more than Kentucky workers because Tennessee has no state income tax while Kentucky imposes a flat 4% state income tax on all taxable income. At a $55,000 annual salary, a Kentucky worker would owe approximately $1,700 to $2,200 in state income tax, money that a Tennessee worker keeps entirely. However, Tennessee's significantly higher sales tax rate (up to 9.75% vs. Kentucky's 6%) means you pay more on everyday purchases. The net advantage depends on your spending habits: high earners who save and invest a large portion of their income tend to benefit more from Tennessee's no-income-tax structure. You can compare directly using our Kentucky paycheck calculator .

How do tips affect my Tennessee paycheck?

Tennessee's hospitality industry, particularly in Nashville's booming restaurant, bar, and entertainment scene, employs a large tipped workforce including servers, bartenders, musicians, and tour guides. Tips are considered taxable income by the IRS, and your employer must withhold federal income tax and FICA on all reported tip income in addition to your base hourly wage. If you receive $20 or more in tips during any calendar month, you are required to report them to your employer using Form 4070. Many tipped workers in Nashville's Broadway honky-tonk district find that their base hourly wage paychecks are nearly zero after withholding, because all federal tax and FICA obligations are deducted from the base pay first while cash tips are retained separately.

Tennessee Paycheck Calculator (Hourly) — Free Take-Home Pay Estimator

How the Tennessee Paycheck Calculator Works

This Tennessee paycheck calculator hourly tool computes your take-home pay by subtracting federal income tax and FICA (Social Security + Medicare) from your gross earnings. Because Tennessee levies no state income tax on wages, only federal deductions apply, which makes the calculation simpler than in most other states and means you keep more of every dollar earned.

The core formula:

Take-Home = Gross Pay - Federal Tax - Social Security - Medicare

P_{net} = P_{gross} - T_{fed} - T_{SS} - T_{Med}

Annual gross pay is calculated as: hourly wage x hours per week x 52 weeks. If you want to convert your hourly rate to an annual salary or vice versa, our salary calculator can help. The per-period amount divides your annual figure by the number of pay periods in the year (52 for weekly, 26 for biweekly, 24 for semi-monthly, 12 for monthly).

Federal income tax uses a progressive bracket system, meaning different portions of your income are taxed at different rates. For a single filer in 2026, the first $11,925 of taxable income is taxed at 10%, income from $11,926 to $48,475 is taxed at 12%, income from $48,476 to $103,350 is taxed at 22%, and higher brackets continue at 24%, 32%, 35%, and 37%. Your taxable income is your gross pay minus any pre-tax deductions and the standard deduction ($15,000 for single filers, $30,000 for married filing jointly, $22,500 for head of household). Only the income within each bracket is taxed at that bracket's rate, so moving into a higher bracket does not retroactively increase the tax on your lower income.

FICA taxes are split into two components. Social Security tax is a flat 6.2% applied to all wages up to the annual wage base of $176,100. Once your cumulative earnings for the year exceed that threshold, no additional Social Security tax is withheld. Medicare tax is a flat 1.45% on all wages with no upper limit, plus an additional 0.9% surtax on wages exceeding $200,000 for single filers or $250,000 for married joint filers. Your employer pays a matching 6.2% Social Security and 1.45% Medicare on your behalf, but that employer share does not reduce your paycheck.

Tennessee Hourly Paycheck Tax Breakdown

Tennessee imposes no state income tax on wages, salaries, or any other form of earned income. The Tennessee Constitution has long prohibited the legislature from levying a tax on earned income, a protection that dates back decades and has been fiercely defended by voters and lawmakers alike. Multiple attempts to introduce a state income tax in Tennessee, most notably during the early 2000s, were met with massive public protests at the state capitol in Nashville and ultimately failed. This constitutional prohibition gives Tennessee workers a high degree of certainty that their tax-free status on wages will persist indefinitely.

Tennessee did historically impose the Hall Tax, named after state senator Frank Hall, which levied a flat tax on interest and dividend income at a rate that peaked at 6% before being gradually reduced. The Hall Tax was phased out under legislation signed in 2016, with the rate declining by 1% each year until it reached zero and was fully repealed on January 1, 2021. Since the repeal, Tennessee residents pay no state-level tax on any form of personal income, including wages, interest, dividends, and capital gains. This makes Tennessee one of the most tax-friendly states in the nation for both wage earners and investors.

Tennessee's tax-free status on wages stands in contrast to several of its neighbors. North Carolina imposes a flat state income tax of approximately 4.5%, Georgia uses a graduated system with rates reaching 5.49%, and Kentucky levies a flat 4% state income tax. An hourly worker earning $55,000 annually in Tennessee keeps an additional $2,000 to $3,000 compared to an identical worker in those neighboring states. However, Tennessee compensates for the absence of income tax revenue with one of the highest combined sales tax rates in the country, reaching up to 9.75% when state and local rates are combined. Groceries in Tennessee are taxed at a reduced state rate of 4%, but local taxes still apply, making the effective grocery tax rate higher than in many states that exempt food entirely. You can compare your take-home pay directly using our North Carolina paycheck calculator or Georgia paycheck calculator.

Tennessee's economy is diverse and growing rapidly, anchored by several major industries that benefit from the state's favorable tax climate. Nashville has become a national hub not only for country music but also for healthcare, with HCA Healthcare headquartered in the city and dozens of hospital systems and health services companies operating from the metro area. Memphis serves as a global logistics powerhouse, home to the FedEx world hub at Memphis International Airport, making it one of the busiest cargo airports on the planet. The state's auto manufacturing sector is substantial, with Nissan operating a massive assembly plant in Smyrna and Volkswagen producing vehicles in Chattanooga. Tennessee is also world-famous for its whiskey industry, with Jack Daniel's distillery in Lynchburg drawing hundreds of thousands of visitors annually and George Dickel operating nearby in Tullahoma.

Your Tennessee paycheck deductions come from three federal sources:

Federal income tax: Calculated using progressive IRS brackets based on your filing status and taxable income (gross minus the standard deduction and pre-tax contributions). You can estimate your full-year federal liability with our income tax calculator.
Social Security: A flat 6.2% on wages up to the annual wage base of $176,100. Wages above this threshold are exempt from Social Security tax for the remainder of the calendar year.
Medicare: A flat 1.45% on all wages, plus an additional 0.9% surtax on wages exceeding $200,000 (single) or $250,000 (married filing jointly).

Variable Definitions

Hourly Wage: Your gross pay per hour before any deductions. This is the rate your employer pays you, not your effective rate after taxes. If you receive tips, enter your base hourly rate only and note that tips are taxed separately when reported. A server working on Nashville's Broadway entertainment strip earning a base tipped wage plus substantial tips will see different tax treatment on each component: the base pay is straightforward payroll, while tips must be reported and are subject to the same federal income tax and FICA withholding.

Hours per Week: The total hours you work each week. Standard full-time is 40 hours. If your hours vary, use your average over the past month. Many Tennessee manufacturing workers, particularly those at the Nissan plant in Smyrna or the VW facility in Chattanooga, work rotating shift schedules that may include overtime. Averaging over a longer period gives a more accurate annual estimate. Overtime hours (above 40 per week) should use your overtime rate in a separate calculation, as federal law requires overtime pay at 1.5 times the regular rate for hours exceeding 40 in a workweek.

Pay Frequency: How often you receive a paycheck. Weekly means 52 paychecks per year, biweekly means 26, semi-monthly means 24 (typically the 1st and 15th of each month), and monthly means 12. Tennessee law requires employers to pay employees at least once per month, making it one of the more flexible states regarding pay frequency. However, most employers in the state pay biweekly or semi-monthly. This setting affects per-period amounts but not annual totals.

Filing Status: Your federal tax filing status, which determines your standard deduction and the income thresholds for each tax bracket. Single applies to unmarried individuals and carries a standard deduction of $15,000. Married Filing Jointly combines both spouses' income but doubles the standard deduction to $30,000, which can produce significant tax savings for couples where one spouse earns substantially more than the other. Head of Household applies to unmarried individuals who pay more than half the cost of maintaining a home for a qualifying dependent and offers a standard deduction of $22,500.

Pre-Tax Deduction: The percentage of gross pay you contribute to tax-advantaged accounts like a 401(k), 403(b), traditional IRA, or HSA. These contributions reduce your taxable income, lowering your federal tax bill. Major Tennessee employers such as HCA Healthcare, FedEx, Nissan North America, and Dollywood/Herschend Enterprises offer 401(k) plans with employer matching, making pre-tax contributions especially valuable for building long-term retirement savings while reducing your current tax burden.

Worked Example 1: Tennessee Hourly Paycheck at $18/Hour

A single filer earning $18/hour, working 40 hours/week, biweekly pay, with a 3% pre-tax 401(k) contribution:

Annual gross: $18 x 40 x 52 = $37,440
Pre-tax deduction: $37,440 x 3% = $1,123.20
Taxable gross: $37,440 - $1,123.20 = $36,316.80
Federal taxable income: $36,316.80 - $15,000 (standard deduction) = $21,316.80
Federal tax: ($11,925 x 10%) + ($9,391.80 x 12%) = $1,192.50 + $1,127.02 = $2,319.52
Social Security: $36,316.80 x 6.2% = $2,251.64
Medicare: $36,316.80 x 1.45% = $526.59
State tax: $0 (Tennessee has no income tax)
Total deductions: $1,123.20 + $2,319.52 + $2,251.64 + $526.59 = $6,220.95
Annual take-home: $37,440 - $6,220.95 = $31,219.05
Biweekly take-home: $31,219.05 / 26 = $1,200.73

This example represents a typical entry-level worker in Tennessee's growing service or manufacturing sectors. At $18 per hour, this worker falls primarily in the 10% and 12% federal tax brackets, and the 3% 401(k) contribution reduces taxable income while building retirement savings. Without state income tax, the effective total tax rate on gross pay is approximately 13.6%, leaving the worker with a strong majority of their earnings. An identical worker in neighboring Georgia or North Carolina would take home roughly $30 to $55 less per biweekly paycheck due to state income tax obligations.

Worked Example 2: Tennessee Hourly Paycheck at $48/Hour

A married filer earning $48/hour, working 40 hours/week, biweekly pay, with an 8% pre-tax 401(k) contribution:

Annual gross: $48 x 40 x 52 = $99,840
Pre-tax deduction: $99,840 x 8% = $7,987.20
Taxable gross: $99,840 - $7,987.20 = $91,852.80
Federal taxable income: $91,852.80 - $30,000 (standard deduction) = $61,852.80
Federal tax: ($23,850 x 10%) + ($38,002.80 x 12%) = $2,385 + $4,560.34 = $6,945.34
Social Security: $91,852.80 x 6.2% = $5,694.87
Medicare: $91,852.80 x 1.45% = $1,331.87
State tax: $0 (Tennessee has no income tax)
Total deductions: $7,987.20 + $6,945.34 + $5,694.87 + $1,331.87 = $21,959.28
Annual take-home: $99,840 - $21,959.28 = $77,880.72
Biweekly take-home: $77,880.72 / 26 = $2,995.41

This example represents a skilled professional such as a healthcare administrator at one of Nashville's major hospital systems, a logistics manager at FedEx in Memphis, or an automotive engineer at the Nissan or Volkswagen plants. The married filing jointly status doubles the standard deduction to $30,000 and widens the lower tax brackets, producing significant savings compared to single filing. The 8% 401(k) contribution shelters $7,987.20 from federal tax, saving approximately $950 to $1,500 in annual federal taxes depending on the marginal bracket. An identical worker in neighboring North Carolina earning $99,840 would owe approximately $3,500 to $4,500 in state income tax, making the Tennessee take-home advantage roughly $135 to $175 per biweekly paycheck.

Edge Cases and Advanced Scenarios

Tipped workers in Nashville's entertainment industry: Nashville's Lower Broadway, the Gulch, and East Nashville neighborhoods are packed with restaurants, bars, and live music venues that employ thousands of tipped workers. Servers, bartenders, and musicians who receive tips must report all tip income to their employers, and the employer is required to withhold federal income tax and FICA on that reported amount. For a bartender at a busy Broadway honky-tonk earning a base wage of $2.13 per hour (the federal tipped minimum) plus $300 to $500 per shift in tips, the withholding on tips alone can consume the entire base wage paycheck, resulting in a net paycheck of $0 or near $0. The actual take-home in that scenario is the cash and credit card tips retained minus any shortfall that must be settled when filing the annual tax return. Use this calculator for your base wage only and account for tips separately in your tax planning.

Auto manufacturing shift workers and overtime: Tennessee's auto manufacturing sector, anchored by the Nissan plant in Smyrna (one of the most productive auto plants in North America) and the Volkswagen assembly facility in Chattanooga, employs thousands of workers on rotating shift schedules. These workers frequently earn overtime pay during peak production periods, with some shifts running 10 to 12 hours. Overtime pay at 1.5 times the regular rate pushes annual gross income higher and can move workers into a higher federal tax bracket. For example, a line worker earning $24 per hour who works an average of 48 hours per week (8 hours of overtime) has an effective average hourly rate of $27 when overtime is blended in, significantly increasing both gross pay and federal tax withholding. This calculator assumes a single hourly rate, so workers with regular overtime should run separate calculations for regular and overtime hours.

Cross-border workers with Kentucky, Georgia, and other neighbors: Tennessee shares borders with eight states, more than almost any other state in the nation, creating numerous cross-border commuting scenarios. Workers who live in Tennessee but commute to Kentucky, Georgia, North Carolina, Virginia, Alabama, Mississippi, Arkansas, or Missouri must pay income tax to the state where they work, even though they owe nothing to Tennessee. Conversely, workers who live in a neighboring state and commute into Tennessee for work owe state income tax to their home state but nothing to Tennessee. Kentucky and Virginia have reciprocal agreements with some states, but not with Tennessee, which can create complexity for border workers. A worker living in Clarksville, Tennessee, and commuting to Fort Campbell or a job across the border in Kentucky would owe Kentucky's 4% state income tax on wages earned in Kentucky. Use our Kentucky paycheck calculator or Alabama paycheck calculator to estimate the impact if you work across state lines.

Additional Medicare tax for high earners: If your wages exceed $200,000 (single) or $250,000 (married), you owe an additional 0.9% Medicare surtax on the excess. This is withheld by your employer once your year-to-date wages cross the threshold. For a Nashville healthcare executive earning $220,000 filing single, the additional Medicare tax is ($220,000 - $200,000) x 0.9% = $180. This surtax applies on top of the standard 1.45% Medicare rate, bringing the total Medicare rate to 2.35% on wages above the threshold. Healthcare is one of Nashville's largest employment sectors, and many senior professionals in hospital administration, medical device companies, and health insurance firms earn salaries that trigger this surtax.

What to Do with Your Tennessee Paycheck Result

Compare your calculated take-home pay to your actual paycheck stub. If they differ significantly, check whether your employer is withholding at a different rate or if you have additional payroll deductions (health insurance, union dues, garnishments) not captured here.
Use the annual take-home figure to build a monthly budget. Divide by 12 for a monthly spending target that accounts for all federal taxes. Keep in mind that Tennessee's combined sales tax of up to 9.75% means your purchasing power on taxable goods is reduced compared to states with lower sales taxes, so factor that into your spending plan.
Consider increasing your 401(k) contribution. In Tennessee, every dollar contributed reduces your federal tax but costs you nothing in state tax, maximizing the benefit of pre-tax contributions. Major employers like HCA Healthcare and FedEx offer competitive matching programs.
If you are comparing job offers across states, use this result alongside the Kentucky, Georgia, and North Carolina calculators to see how state taxes affect your actual take-home pay for the same hourly rate.
Use our federal income tax percentage calculator to check your effective federal tax rate and see what share of your gross income goes to federal taxes overall.

Related Calculators

Kentucky Paycheck Calculator (Hourly) — Kentucky imposes a flat 4% state income tax; see how it compares to Tennessee's zero rate.
Georgia Paycheck Calculator (Hourly) — Georgia uses graduated state income tax rates up to 5.49%.
North Carolina Paycheck Calculator (Hourly) — North Carolina levies a flat state income tax of approximately 4.5%.
Alabama Paycheck Calculator (Hourly) — compare with Alabama's graduated state income tax system.
Mississippi Paycheck Calculator (Hourly) — see how Mississippi's state income tax affects take-home pay.
Salary Calculator — convert between hourly and annual pay.
Income Tax Calculator — estimate your total federal income tax liability.
Federal Income Tax Percentage Calculator — find your effective federal tax rate.
Paycheck Calculator by State — compare take-home pay across all 50 states and DC.

Tennessee Paycheck Calculator (Hourly)