--- title: "EOR or Entity in Tennessee: Which Fits Your Plan" description: "Compare hiring through Teamed's EOR versus forming your own Tennessee entity, with real franchise tax and filing facts, not guesses." canonical: https://www.teamed.global/country-hiring-guides/united-states/tennessee/eor-vs-entity --- ![Tennessee business district.](/cluster-assets/country-hiring-guides/united-states/tennessee/eor-vs-entity/images/hero.webp) # EOR or entityin Tennessee. Teamed hires your Tennessee team under its own entity now, then helps you set up and migrate to your own later, no gap. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Tennessee guide At a glance ## What Tennessee actually costs you either way Tennessee taxes corporate income at 6.5% and layers on a franchise tax calculated on margin, with a minimum of $100 even in a loss year. Registering your own entity with the Secretary of State carries a filing fee. An EOR absorbs all of that into one line item, no separate registration, no separate franchise return. Corporate income tax6.5% Minimum franchise tax$100 Franchise tax basismargin Formation / registration fee$300 The entity path ## What forming your own Tennessee entity involves Setting up in Tennessee means registering with the Secretary of State and paying the formation fee, then staying current on two separate obligations every year after that: corporate income tax at 6.5% and a franchise tax based on margin, with a floor of $100 no matter how the business performed. None of that is unusual for a state entity, but it is ongoing work. You need someone tracking the franchise tax basis, filing on time, and keeping the entity in good standing even in a year when you barely used it. For a single hire or a small pilot team, that overhead often outweighs the benefit of owning the entity outright. The EOR path ## How Teamed's EOR sidesteps that entirely When Teamed employs your Tennessee team through its own entity, you skip the Secretary of State filing, the annual franchise tax return, and the corporate income tax exposure tied to a local registered business. Teamed carries that compliance load as the employer of record, and you get a payroll line item instead of a state tax filing calendar. This matters most when you are not yet sure Tennessee is a long-term bet. You get the same local hire, the same compliant payroll and benefits, without registering a legal entity you might later have to dissolve if plans change. Before you commit ## Sometimes an employer of record is the better fit An EOR is sometimes the better answer, not a lesser one, especially for a small or still-changing headcount, or when you are testing whether Tennessee is the right market before committing. Talk to a member of the team about your specific situation, or run the numbers yourself in the crossover calculator, since the right call depends on salaries and how long you intend to stay. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue. Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. In Tennessee that means Teamed handles the Secretary of State registration, gets your franchise and excise tax accounts set up correctly against the margin basis, and transfers your employees onto your new entity without a break in their employment or benefits. Across 100+ countries, GEMO runs the same playbook, you get the entity, we get out of the way. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Tennessee Questions ## Tennessee EOR and entity questions Does an EOR help me avoid Tennessee's franchise tax? Yes, because Teamed's entity is the one filing and paying Tennessee's franchise tax, not yours. The minimum franchise tax of $100 applies even at low margins, so an EOR removes that fixed cost from your books entirely while you use it. What does it cost to register my own entity in Tennessee? The Tennessee Secretary of State charges a formation and registration fee for a new entity. That is separate from the ongoing franchise and corporate income tax obligations you take on once the entity exists. Is Tennessee's corporate income tax the same for every business structure? Tennessee applies a 6.5% corporate income tax rate under its franchise and excise tax framework. Whether that applies to you depends on how your entity is structured and whether you have a registered presence in the state at all. When should I move from Teamed's EOR to my own Tennessee entity? There is no fixed headcount that triggers the switch. It depends on your salary levels, how long you plan to stay in Tennessee, and whether the ongoing franchise tax and filing work makes sense for your team size, which the crossover calculator can help you work through. Can Teamed help me set up a Tennessee entity later? Yes, through GEMO, Teamed's Global Entity and Employment Operations service. Teamed handles the registration and franchise tax setup, then migrates your employees onto the new entity without disrupting their employment. Where these figures come from ## Sources Figures in this page come from the Tennessee Department of Revenue's franchise and excise tax basics and the Tennessee Secretary of State. ## More on entities in Tennessee - [Hiring in Tennessee, overview](/country-hiring-guides/united-states/tennessee)parent - [Tennessee setting up](/country-hiring-guides/united-states/tennessee/entity-setup)sibling - [Tennessee running costs](/country-hiring-guides/united-states/tennessee/entity-running-costs-and-filings)sibling - [Tennessee tax presence](/country-hiring-guides/united-states/tennessee/permanent-establishment-risk)sibling - [Tennessee moving from an eor](/country-hiring-guides/united-states/tennessee/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Tennessee](https://www.teamed.global/contact?from=eor-vs-entity)CTA