What do you need to know to hire in Tennessee?
No state income tax, a federal $7.25 wage floor, and a 21-day final-pay rule on a separation. Each Tennessee guide below takes one layer of state rule.
· Tennessee, United States guide
Illustration · Nashville, Tennessee
Tennessee takes no state income tax, so the paycheck math reads simple. The unemployment-insurance schedule, the 21-day final-pay rule, and its own maternity-leave act are where the real work sits.
The federal floor is identical to every other state: FLSA, FICA, FUTA and FMLA set the baseline. Everything Tennessee adds on top is what these guides cover.
Most employers budget for the $7,000 unemployment wage base and miss both the 21-day final-pay deadline and the Tennessee Maternity Leave Act at 100 employees. This page is the map; each guide is the detail.
What do you need to know to hire in Tennessee?
Tennessee runs on the federal employment floor with almost nothing added on the pay side and a sharper set of rules on leave and separation. There's no state income tax on wages, no state minimum above the federal $7.25, and no state overtime beyond the 40-hour federal week.
Where Tennessee gets specific is unemployment insurance, its own maternity-leave act, final pay, and the at-will exceptions. Each guide below takes one of those layers.
Sienna runs payroll for a 12-person team and just approved her first Tennessee hire. The federal stack she already knows still applies: Social Security to $184,500, FUTA, and FMLA once the company passes 50 employees. Tennessee layers its own unemployment tax, its own 4-month maternity-leave act at 100 employees, its own 21-day final-pay rule, and its own at-will carve-outs on top.
Start from the United States overview for the federal baseline. This page is the Tennessee-specific layer, and the guides below break it into the questions an employer actually asks before a first hire.
What does an employer actually pay in Tennessee?
The Tennessee-specific cost is unemployment insurance plus the federal pass-through. There's no state income tax to withhold on wages and no state-mandated paid benefit beyond the federal floor.
Unemployment insurance runs on a $7,000 taxable wage base. A new employer starts at 2.7%, and experience-rated accounts land between 0.01% and 10%.
State income tax: none, Tennessee taxes no wage income, and the Hall tax on interest and dividends was fully repealed in 2021. Minimum wage: the federal $7.25 an hour, with $2.13 cash for tipped roles. Overtime: time and a half after 40 hours a week, no daily rule, and a 30-minute unpaid meal break on a six-hour shift.
Unemployment insurance: a $7,000 wage base, 2.7% for a new employer, 0.01% to 10% once experience-rated. Final pay: within 21 days of a separation, or the next regular payday, whichever is later.
Sources: Tennessee Dept of Labor & Workforce Development, UI tax rates and US DOL state minimum wage.
The figures above are the headline. The detail, from the SUTA filing cadence to the tip credit and the exempt-salary threshold, sits in the Tennessee tax and unemployment guide and the wage and overtime guide.
The Tennessee guides, one layer at a time
Four Tennessee guides are live, one per layer of state rule. Each answers the questions an employer asks before the first hire, with the statutory numbers pulled from the same Tennessee source set.
State income tax & unemployment insurance
Why Tennessee taxes no wage income, the $7,000 SUTA wage base, new-employer and experience rates, and the quarterly filing rhythm.
Wage, overtime & meal break law
The federal $7.25 floor, the 40-hour overtime week, the tip credit, and the 30-minute meal break Tennessee does mandate.
Paid family & sick leave
The Tennessee Maternity Leave Act, up to 4 months at 100+ employees, what federal FMLA covers at 50+, and the pregnancy accommodation rules.
Termination & at-will exceptions
The public-policy exception, the 21-day final-pay rule, and the federal WARN math on a mass layoff.
The Tennessee worker-classification guide, the state's test for employee versus contractor, is the next one we're building. Need it sooner? Tell us and we'll move it up the queue.
How does Tennessee compare to its neighbours?
Tennessee is a clean at-will state with no wage income tax, but each neighbour breaks the pattern somewhere. The federal floor is identical; the state layer is not.
Cross a state line and the math changes. Georgia shares the at-will baseline but levies a state income tax Tennessee doesn't. Kentucky runs its own flat income tax and a tighter final-pay clock. North Carolina also taxes wage income and sets its own wage-payment rules above the federal $7.25 floor Tennessee uses.
If you're hiring across the region, read each state's guides before you set payroll. The structure is the same everywhere; the SUTA base, the leave mandate, and the termination rules are not.
How does Teamed hire in Tennessee for you?
Teamed becomes your legal employer of record in Tennessee for from $599 per employee per month, with zero FX mark-up in any currency. Payroll, the unemployment registration, the 21-day final-pay rule, and the federal stack run on one platform.
There's no setup fee and no exit fee, and statutory employer cost passes through at cost, itemised on every invoice.
Real HR and legal experts handle your Tennessee hires, from the first offer letter to a contested termination. An actual person, not a chatbot or a pooled queue, who knows the Tennessee Maternity Leave Act and the 21-day Payment of Employees rule. There's no setup fee and no exit fee, the platform tracks every federal trigger in real time, and statutory employer cost passes through at cost, itemised on every invoice.
Contractor onboarding, EOR payroll, and entity setup live on one platform. A Tennessee contractor who converts to W-2 keeps their record, and that same employee can graduate from EOR to your own US entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Tennessee hire, until it isn't.
Tennessee reads as the easy state: no income tax, strong at-will, a light wage code. The catch is its own maternity-leave act at 100 employees and a 21-day final-pay rule the federal charge does not care about. These guides exist so the first Tennessee hire never becomes the first Tennessee filing.
Tennessee looks like the simple state to hire in. No income tax, at-will, a federal wage floor and little above it.
The simple part ends at leave and separation. A 21-day final-pay rule, and a maternity-leave act at 100 employees that the federal floor never mentions.
Read the right guide before the first hire, not after the first dispute.
