Tennessee Payroll Taxes for Employers (2026): SUTA and State Programs
Last updated: 2026-10-12 · 2026 rates checked against TN Dept. of Labor & Workforce Development's own pages and the other official sources below
Tennessee employers pay state unemployment tax (SUTA) on the first $7,000 of each employee's wages in 2026, and new employers pay 2.7% — at most $189.00 per employee for the year. Every Tennessee employer also pays federal Social Security (6.2% up to $184,500), Medicare (1.45%) and FUTA (0.6% on the first $7,000).
What will payroll taxes cost me in Tennessee?
Enter your headcount and average pay to see the employer's share of Tennessee and federal payroll taxes for 2026. Change the SUTA rate to the one on your rate notice.
Tennessee employer payroll tax estimator · 2026
Runs in your browser · nothing is sent anywhere| Tax | Per year |
|---|---|
Tennessee unemployment (SUTA) 2.7% × first $7,000 per employee | $945 |
Federal unemployment (FUTA) 0.6% × first $7,000 after the full state credit | $210 |
Social Security (employer half) 6.2% × first $184,500 | $15,500 |
Medicare (employer half) 1.45% of all wages | $3,625 |
| Total employer taxes | $20,280 |
| Per employee | $4,056 |
Assumes every employee earns the average and works in Tennessee all year. Workers' comp premiums and benefits are extra — the payroll cost calculator adds them.
Tennessee unemployment insurance tax (SUTA) in 2026
- 2026 taxable wage base
- $7,000 per employee (51st highest of 51)
- New-employer rate
- 2.7%
- How the new-employer rate works
- 2.7% for all industries except manufacturing (NAICS 31–33), which gets sector-based rates.
- Most a new employer pays per employee
- $189.00 (2.7% × $7,000)
- 2025 average employer rate
- 0.97% of taxable wages (U.S. DOL)
- Employee contribution
- None — employer-paid only
Same $7,000 wage base as Arkansas, California, Florida and Louisiana. Register with TN Dept. of Labor & Workforce Development when you first pay wages in Tennessee; you get an account number for quarterly wage reports and tax payments.
Federal payroll taxes every Tennessee employer pays
- Social Security: 6.2% from you and 6.2% withheld from the employee, on wages up to $184,500 in 2026.
- Medicare: 1.45% each on all wages; withhold an extra 0.9% (employee only) on wages over $200,000.
- FUTA: 6.0% of the first $7,000 per employee, less up to 5.4% credit for Tennessee unemployment tax paid on time = 0.6%, or $42 per employee.
- Federal income tax withholding from each paycheck based on the employee's Form W-4.
Next for Tennessee employers: Tennessee paycheck calculator (employee withholding) · Tennessee new hire reporting · Tennessee payday & final paycheck rules · Tennessee workers' comp · full payroll cost calculator
Tennessee payroll tax FAQ
What is the Tennessee SUTA rate for new employers in 2026?
2.7%. 2.7% for all industries except manufacturing (NAICS 31–33), which gets sector-based rates.
What is the Tennessee SUTA wage base for 2026?
$7,000 per employee. Once an employee's 2026 wages pass that amount, you stop paying Tennessee unemployment tax on them for the rest of the year. That is the 51st highest wage base of the 50 states and DC (the federal FUTA base is $7,000).
Do employees pay unemployment tax in Tennessee?
No. In Tennessee unemployment tax is paid only by the employer; it can't be deducted from pay. Only Alaska, New Jersey and Pennsylvania collect an employee share.
What other payroll taxes do Tennessee employers pay?
For 2026, Tennessee has no statewide paid-leave or disability payroll tax, so the state-level employer tax is unemployment insurance. You still withhold any state income tax from employees' pay.
How much FUTA do Tennessee employers pay?
0.6% of the first $7,000 of each employee's wages — $42 per employee per year — after the full 5.4% credit for paying Tennessee unemployment tax on time. Tennessee is not a credit-reduction state for 2026.
How does my Tennessee SUTA rate change after the first years?
New employers keep the new-employer rate until they have enough history to be experience-rated (the timing is set by state law). After that, TN Dept. of Labor & Workforce Development assigns a rate each year based on your layoffs and benefit charges. Use the rate on your annual rate notice. The 2025 average employer rate in Tennessee was 0.97% of taxable wages.
Official Sources
Figures checked against these sources on 2026-10-12Related Resources on This Site
More for your state
- GuideTennessee small business guide
- Workers' CompTennessee workers comp requirements
- Business LicenseTennessee business license requirements
- Resale PermitTennessee resale certificate & seller's permit
- LLChow to form an LLC in Tennessee
- FormationTennessee annual report due date, fee & franchise tax
- Sales TaxTennessee sales tax rates & rules
- Minimum WageTennessee minimum wage
Helpful guides
- Formationoperating agreement template (free)
- Sales Taxsales tax rates & rules by state
- Estimated Taxesquarterly estimated taxes — when and how to pay
- Income Taxstate income tax rates and brackets 2026
Payroll taxes in other states
All states in one table, plus federal deposit rules and deadlines →
General information, not tax advice. Rates change every year; confirm yours on the notice from TN Dept. of Labor & Workforce Development before filing.