Does Tennessee Tax Your Paycheck?
No. Tennessee never taxed wage income, and it finished repealing the Hall tax on interest and dividends effective 2021. In 2026 there is no state income tax of any kind, on wages or investments. Your pay stub shows federal tax and FICA and nothing for Nashville.
The tradeoff is at the checkout. Tennessee's combined state and local sales tax rates average close to 9.5%, among the highest in the country, with local rates in Nashville and Memphis pushing higher. The state chose to tax spending rather than earning, and the choice is visible in every receipt.
Using the Calculator
Tennessee is preselected below. Enter your salary and pay frequency to see take-home pay with zero state withholding. Nashville's growth has made this one of the most-used comparisons for relocators.
Weigh it against the neighbors. The same paycheck through our North Carolina paycheck calculator or the Virginia version shows what income-tax states take from the identical salary.
Where Your Tennessee Paycheck Goes
Federal income tax and FICA are the only government deductions on a Tennessee paycheck. There is no state withholding, no state disability insurance, and no paid family leave payroll tax. Music industry, healthcare, and logistics workers in Nashville all see the same short stub.
Because there is no wage tax to withhold, Tennessee payroll is simple for employers too, which is one more reason the state pitches itself to businesses relocating from high-tax states.
Tennessee Payroll Details to Know
Minimum wage and overtime
Tennessee has no state minimum wage law and follows the federal $7.25 per hour rate. Overtime follows the federal Fair Labor Standards Act at time and a half after 40 hours in a week.
Payday rules
Tennessee requires semimonthly paydays for most private employers, with wages due by the regular scheduled payday. Final pay after separation is due by the next regular payday or within 21 days.
The Hall tax history
Older Tennessee pages still mention the Hall tax, a 1% to 2% levy on interest and dividends that was phased out and gone by 2021. If you see it referenced, that information is outdated. Retirees living off investments in Knoxville or Chattanooga now face zero Tennessee tax on that income.
Worked Example: $75,000 in Nashville
Take a single filer in Nashville earning $75,000, paid biweekly. Federal tax on $58,900 of taxable income is about $7,670, FICA takes $5,737.50, and Tennessee takes $0. The stub ends there.
| Item | Annual Amount |
| Gross Pay | $75,000.00 |
| Federal Income Tax | ~$7,670.00 |
| Social Security (6.2%) | $4,650.00 |
| Medicare (1.45%) | $1,087.50 |
| Tennessee State Income Tax | $0.00 |
| Net Annual Pay | ~$61,592.50 |
Net pay is about $61,592 a year, or roughly $2,368.94 every two weeks, an effective rate near 17.9%. The same salary in a mid-tax state nets several thousand less, before you ever account for Tennessee's higher sales taxes. Run your own numbers above.
Paycheck Mistakes Tennessee Workers Make
- Believing the Hall tax still exists. It was fully repealed effective 2021.
- Ignoring the near-9.5% combined sales tax when budgeting. The paycheck is bigger, but spending costs more.
- Assuming no state tax means no deductions. Federal tax and FICA still take about 18% here.
- Comparing a Nashville offer to another city on gross pay instead of net take-home pay.
- Forgetting that Tennessee's lack of a state minimum wage law means the federal floor applies.
Frequently Asked Questions
Does Tennessee have a state income tax?
No. The Hall tax on investment income was repealed effective 2021, and wages were never taxed. No income tax of any kind exists in 2026.
What is the minimum wage in Tennessee for 2026?
$7.25 per hour. Tennessee has no state minimum wage law.
Do Tennessee workers pay state disability tax?
No state disability insurance or paid family leave payroll tax exists in Tennessee.
Why are Tennessee sales taxes so high?
With no income tax, the state relies on consumption taxes, averaging close to 9.5% combined.
Can Tennessee cities charge income tax?
No. Tennessee municipalities are barred from imposing wage taxes.
Does Tennessee tax retirement income?
There is no income tax at all, so retirement income faces no Tennessee tax.
More Tennessee and Paycheck Tools
Build a matching stub with the Pay Stub Generator, or see the spending side with the Tennessee sales tax calculator. Compare with the North Carolina and Virginia paycheck calculators, or return to the main Paycheck Calculator.
Sources: IRS Publication 15-T, U.S. Department of Labor, Tax Foundation 2026 state tax brackets, the Tennessee Department of Revenue. Figures reflect 2026 tax law. This calculator gives an estimate for planning purposes and is not tax advice.