Tennessee Payroll Compliance
Every rate, wage base, and threshold Tennessee employers need for 2026 — sourced from the Dept. of Labor and Workforce Development — including why Tennessee runs one of the simplest state-level payroll obligations in the country.
Minimum Wage & Hours
Tennessee has no minimum wage law of its own — there is no state statute to point to at all. The federal FLSA floor of $7.25/hour applies by default wherever the business is covered by federal law, which is nearly universal.
| Item | 2026 Value | Notes |
|---|---|---|
| Effective minimum wage | $7.25/hr | Federal FLSA controls entirely; no state minimum wage law exists |
| Overtime rule | 40 hrs/week | Federal FLSA; no separate state overtime statute |
| Local wage ordinances | None | No Tennessee city or county sets its own minimum wage |
State Income Tax Withholding
Tennessee is one of nine states with no personal income tax, and unlike some no-tax states, it also has zero local income taxes anywhere — a genuinely uncomplicated withholding picture.
| Item | 2026 Value | Notes |
|---|---|---|
| State income tax | None | No wage withholding required or possible |
| Local income tax | None | No Tennessee city or county imposes one |
| State withholding certificate | None | Employees only complete the federal Form W-4 |
Paid Leave
Tennessee has no state disability insurance, no mandatory paid family/medical leave, and no statewide paid sick leave. Federal FMLA is the only job-protected leave baseline.
Unemployment Insurance (SUI)
Tennessee’s $7,000 SUI wage base — matching the FUTA floor exactly — has held steady for years. The state uses a reserve-ratio system, where an employer’s premium rate is set annually each July 1 based on the four most recent quarters.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $7,000 | Matches the FUTA floor; stable for years |
| New employer rate | 2.7% | Flat rate until an employer accrues rating history |
| Rate methodology | Reserve-ratio | One of 31 states using this formula; effective each July 1 |
| Filing | TNPAWS | TN Premium and Wage Reporting System; mandatory electronic filing |